Securities

12 Months Ended

Dec. 31, 2012

Trading Securities [Abstract]

Securities

Note 3: Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
December 31, 2012:
U.S. government agencies	$	23,980	$	93	$	(3	)	$	24,070
State and political subdivisions		10,345		414		––			10,759
Equity securities		4		20		––			24
	$	34,329	$	527	$	(3	)	$	34,853
Available-for-sale Securities:
December 31, 2011:
U.S. government agencies	$	64,077	$	98	$	(7	)	$	64,168
State and political subdivisions		17,173		652		(8	)		17,817
Equity securities		4		9		––			13
	$	81,254	$	759	$	(15	)	$	81,998

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
December 31, 2012:
State and political subdivisions	$	2,768	$	72	$	––	$	2,840
December 31, 2011:
State and political subdivisions	$	4,450	$	147	$	––	$	4,597

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities at December 31, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities for mortgage-backed securities are presented in the table below based on their projected maturities.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	256	$	263	$	1,322	$	1,365
One to five years		3,156		3,311		1,066		1,094
Five to ten years		9,933		10,182		380		381
After ten years		20,980		21,073		––		––
		34,325		34,829		2,768		2,840
Equity securities		4		24		––		––
Totals	$	34,329	$	34,853	$	2,768	$	2,840

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $25.5 million and $58.2 million at December 31, 2012 and 2011, respectively.

Information with respect to sales of securities and resulting gross realized gains and losses was as follows for the year ended December 31:

	2012		2011
	(In thousands)
Proceeds from sales	$	––	$	9,413
Gross gains		––		370
Gross losses		––		––
Tax expense		––		126

During 2011 the Company sold one security with an amortized cost of $295,000 resulting in a realized gain of approximately $7,000 and is included in the table above under gross gains. This security was classified on the books as held to maturity and was sold due to a credit quality down grade of the municipality issuer.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at December 31, 2012 and 2011, was $3.0 million and $6.3 million, which represented approximately 8.0% and 7.0%, respectively, of the Company’s available-for-sale and held-to-maturity investment portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary.

The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2012 and 2011:

	December 31, 2012
	Less than 12 Months					12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
US Government agencies	$	2,997	$	(3	)	$	––	$	––	$	2,997	$	(3	)
State and political subdivisions		––		––			––		––		––		––
Total temporarily impaired securities	$	2,997	$	(3	)	$	––	$	––	$	2,997	$	(3	)

	December 31, 2011
	Less than 12 Months					12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
US Government agencies	$	5,992	$	(7	)	$	––	$	––	$	5,992	$	(7	)
State and political subdivisions		332		(8	)		––		––		332		(8	)
Total temporarily impaired securities	$	6,324	$	(15	)	$	––	$	––	$	6,324	$	(15	)

The contractual terms of those investments in an unrealized loss position 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 and it is not more likely than not the Company will be required 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 December 31, 2012.