Note 3 - Investment Securities Available for Sale

6 Months Ended

Jun. 30, 2013

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

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

3. Investment Securities Available for Sale

The following tables summarize the amortized cost, gross unrealized gains and losses included in accumulated other comprehensive income (loss) and fair values of investment securities available for sale at the dates indicated (in thousands). At June 30, 2013 and December 31, 2012, the Company did not have any investment securities classified as trading or held-to-maturity.

	June 30, 2013
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
State and municipal	$	8,270	$	206	$	(73	)	$	8,403
Collateralized mortgage obligations (federal agencies)		111,617		101		(3,515	)		108,203
Other mortgage-backed (federal agencies)		89,514		163		(462	)		89,215
SBA loan-backed (federal agency)		40,455		291		(66	)		40,680
Total investment securities available for sale	$	249,856	$	761	$	(4,116	)	$	246,501

	December 31, 2012
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
State and municipal	$	11,247	$	283	$	-		$	11,530
Collateralized mortgage obligations (federal agencies)		122,444		1,219		(155	)		123,508
Other mortgage-backed (federal agencies)		62,581		1,328		(92	)		63,817
SBA loan-backed (federal agency)		65,828		182		(363	)		65,647
Total investment securities available for sale	$	262,100	$	3,012	$	(610	)	$	264,502

The following tables summarize securities in each category of investment securities available for sale that were in an unrealized loss position at the dates indicated (dollars in thousands).

	June 30, 2013
	Less than 12 months						12 months or longer						Total
	#		Fair value		Gross unrealized losses		#		Fair value		Gross unrealized losses		#		Fair value		Gross unrealized losses
State and municipal		1	$	1,012	$	73		-	$	-	$	-		1	$	1,012	$	73
Collateralized mortgage obligations (federal agencies)		23		95,167		3,494		6		2,962		21		29		98,129		3,515
Other mortgage-backed (federal agencies)		16		45,276		416		1		3,363		46		17		48,639		462
SBA loan-backed (federal agency)		2		4,530		54		1		1,270		12		3		5,800		66
Total investment securities available for sale		42	$	145,985	$	4,037		8	$	7,595	$	79		50	$	153,580	$	4,116

	December 31, 2012
	Less than 12 months						12 months or longer						Total
	#		Fair value		Gross unrealized losses		#		Fair value		Gross unrealized losses		#		Fair value		Gross unrealized losses
Collateralized mortgage obligations (federal agencies)		7	$	23,301	$	109		9	$	9,547	$	46		16	$	32,848	$	155
Other mortgage-backed (federal agencies)		3		14,586		92		-		-		-		3		14,586		92
SBA loan-backed (federal agency)		6		25,115		363		-		-		-		6		25,115		363
Total investment securities available for sale		16	$	63,002	$	564		9	$	9,547	$	46		25	$	72,549	$	610

Other-Than-Temporary Impairment

Based on our other-than-temporary impairment analysis at June 30, 2013, we concluded that gross unrealized losses detailed in the preceding table were not other-than-temporarily impaired as of that date.

Ratings

The following table summarizes Moody’s ratings of investment securities available for sale, based on fair value, at June 30, 2013. An “Aaa” rating is based not only on the credit of the issuer but may also include consideration of the structure of the securities and the credit quality of the collateral.

	State and			Collateralized mortgage obligations (federal			Other mortgage-backed (federal			SBA loan-backed (federal
	municipal			agencies)			agencies)			agency)
Aaa		-	%		100	%		100	%		100	%
Aa1 - A1		79			-			-			-
Baa2		5			-			-			-
Not rated		16			-			-			-
Total		100	%		100	%		100	%		100	%

The following table summarizes Standard and Poor’s ratings of investment securities available for sale, based on fair value, at June 30, 2013.

	State and			Collateralized mortgage obligations (federal			Other mortgage-backed (federal			SBA loan-backed (federal
	municipal			agencies)			agencies)			agency)
Aaa		-	%		-	%		1	%		-	%
Aa+		-			100			99			100
Aa - Aa-		30			-			-			-
Not rated		70			-			-			-
Total		100	%		100	%		100	%		100	%

All state and municipal securities were rated by either Moody’s or Standard and Poor’s at June 30, 2013.

Maturities

The following table summarizes the amortized cost and fair value of investment securities available for sale at June 30, 2013 by contractual maturity and estimated principal repayment distribution (in thousands). State and municipal securities are organized based on contractual maturity. Principal amounts on collateralized mortgage obligations, other mortgage-backed securities and SBA loan-backed securities are not due at a single maturity date and are subject to early repayment based on prepayment activity of underlying loans. Therefore, collateralized mortgage obligations, other mortgage-backed securities and SBA loan-backed securities are organized based on estimated cash flows using current prepayment assumptions.

	Amortized cost		Fair value
Due in one year or less	$	4,036	$	4,103
Due after one year through five years		3,149		3,288
Due after five years through ten years		1,085		1,012
Due after ten years		-		-
State and municipal		8,270		8,403
Due in one year or less		13,903		13,941
Due after one year through five years		17,419		17,076
Due after five years through ten years		80,295		77,186
Due after ten years		-		-
Collateralized mortgage obligations (federal agencies)		111,617		108,203
Due in one year or less		213		230
Due after one year through five years		68,829		68,793
Due after five years through ten years		18,433		18,122
Due after ten years		2,039		2,070
Other mortgage-backed (federal agencies)		89,514		89,215
Due in one year or less		-		-
Due after one year through five years		9,786		9,810
Due after five years through ten years		19,119		19,180
Due after ten years		11,550		11,690
SBA loan-backed (federal agency)		40,455		40,680
Total investment securities available for sale	$	249,856	$	246,501

The weighted average duration of the investment securities available for sale portfolio was 3.8 years, based on expected prepayment activity, at June 30, 2013.

Pledged

Investment securities were pledged as collateral for the following purposes at the dates indicated (in thousands).

	June 30,		December 31,
	2013		2012
Public funds deposits	$	110,413	$	106,642
Federal Reserve line of credit		1,427		1,583
Total	$	111,840	$	108,225