NOTE C – SECURITIES

A summary of amortized cost and estimated fair value of securities available-for-sale and securities held-to-maturity at December 31, 2011 and 2010, follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(In thousands)
December 31, 2011:
Securities available-for-sale:
U. S. Government agencies	$	9,539	$	43	$	4	$	9,578
Mortgage-backed securities		36,045		1,864		13		37,896
State and local political
subdivisions		74,546		2,035		83		76,498

	$	120,130	$	3,942	$	100	$	123,972

Securities held-to maturity:
U. S. Government agencies	$	33,905	$	70	$	11	$	33,964
State and local political
subdivisions		13,314		67		8		13,373

	$	47,219	$	137	$	19	$	47,337

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(In thousands)
December 31, 2010:
Securities available-for-sale:
U. S. Government agencies	$	21,242	$	51	$	143	$	21,150
Mortgage-backed securities		41,733		1,688		112		43,309
State and local political
subdivisions		59,497		929		451		59,975
Other equity securities		4		9		-		13

	$	122,476	$	2,677	$	706	$	124,447

Securities held-to maturity:
U. S. Government agencies	$	25,578	$	5	$	600	$	24,983
State and local political
subdivisions		7,517		84		43		7,558

	$	33,095	$	89	$	643	$	32,541

The scheduled maturities of securities at December 31, 2011, are as follows:

	Available-For-Sale				Held-to-Maturity
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
	(In thousands)

Within one year	$	15,500	$	15,565	$	980	$	980
Over one year through five years		36,709		37,782		2,565		2,565
After five years through ten years		12,852		13,367		1,880		1,880
After 10 years		19,024		19,361		41,794		41,912
Mortgage-backed securities		36,045		37,897		-		-

	$	120,130	$	123,972	$	47,219	$	47,337

Investment securities with a carrying value of $76,230,000 and $97,176,000 at December 31, 2011 and 2010, respectively, were pledged to secure public and trust deposits and for other purposes as required or permitted by law.

Gross gains of $342,000 in 2011, $11,000 in 2010 and $20,000 in 2009, and gross losses of $2,000 in 2011, $0 in 2010 and $0 in 2009, were realized on securities available-for-sale. Gross gains of $8,000 were realized in 2011 on securities held-to-maturity due to calls. No gains or losses were realized on securities held-to-maturity for 2010 and 2009.

The details concerning securities classified as available-for-sale with unrealized losses as of December 31, 2011 and 2010 were as follows:

	Losses < 12 Months				Losses 12 Months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
2011
U. S. Government
agencies	$	3,996	$	4	$	-	$	-	$	3,996	$	4
Mortgage-backed
securities		1,003		3		1,620		10		2,623		13
State and local political
subdivisions		9,935		78		304		5		10,239		83

	$	14,934	$	85	$	1,924	$	15	$	16,858	$	100

2010
U. S. Government
agencies	$	8,924	$	143	$	-	$	-	$	8,924	$	143
Mortgage-backed
securities		11,524		112		-		-		11,524		112
State and local political
subdivisions		17,202		369		1,236		82		18,438		451

	$	37,650	$	624	$	1,236	$	82	$	38,886	$	706

The details concerning securities classified as held-to-maturity with unrealized losses as of December 31, 2011 and 2010 were as follows:

	Losses < 12 Months				Losses 12 Months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
2011
U. S. Government
agencies	$	10,008	$	11	$	-	$	-	$	10,008	$	11
State and local political
subdivisions		1,033		8		-		-		1,033		8
	$	11,041	$	19	$	-	$	-	$	11,041	$	19

2010
U. S. Government
agencies	$	19,675	$	600	$	-	$	-	$	19,675	$	600
State and local political
subdivisions		2,144		43		-		-		2,144		43
	$	21,819	$	643	$	-	$	-	$	21,819	$	643

As of December 31, 2011, approximately 11% of the number of securities in the portfolio reflected an unrealized loss. Management is of the opinion the Corporation has the ability and intent to hold these securities until such time as the value recovers or the securities mature. Management also believes the deterioration in value is attributable to changes in market interest rates and not to the credit quality of the issuer.