Note 4 – Investments

The amortized cost and fair value of investment securities at June 30, 2011 and December 31, 2010 were as follows (in thousands):

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
June 30, 2011	Cost	Gains	Losses	Value
Available-for-sale securities:
U.S. Agency securities	$ 143,671	$ 1,841	$ (86)	$ 145,426
Obligations of state and
political subdivisions	90,277	1,858	(323)	91,812
Corporate obligations	8,339	319	-	8,658
Mortgage-backed securities in
government sponsored entities	38,813	2,574	(7)	41,380
Equity securities in financial
institutions	956	397	(19)	1,334
Total available-for-sale securities	$ 282,056	$ 6,989	$ (435)	$ 288,610

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
December 31, 2010	Cost	Gains	Losses	Value
Available-for-sale securities:
U.S. Agency securities	$ 117,390	$ 1,535	$ (441)	$ 118,484
Obligations of state and
political subdivisions	78,164	603	(1,845)	76,922
Corporate obligations	8,415	268	(2)	8,681
Mortgage-backed securities in
government sponsored entities	43,183	2,832	-	46,015
Equity securities in financial
institutions	914	303	(16)	1,201
Total available-for-sale securities	$ 248,066	$ 5,541	$ (2,304)	$ 251,303

The following table shows the Company's gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at June 30, 2011 and December 31, 2010 (in thousands). As of June 30, 2011 and December 31, 2010, the Company owned 36 and 85 securities whose fair value was less than their cost basis, respectively.

June 30, 2011	Less than Twelve Months		Twelve Months or Greater		Total
		Gross		Gross		Gross
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
U.S. Agency securities	$ 17,156	$ (86)	$ -	$ -	$ 17,156	$ (86)
Obligations of state and
political subdivisions	20,224	(311)	608	(12)	20,832	(323)
Mortgage-backed securities in
government sponsored entities	5,171	(7)	-	-	5,171	(7)
Equity securities in financial
institutions	96	(19)	-	-	96	(19)

Total securities	$ 42,647	$ (423)	$ 608	$ (12)	$ 43,255	$ (435)

December 31, 2010	Less than Twelve Months		Twelve Months or Greater		Total
		Gross		Gross		Gross
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
U.S. Agency securities	$ 38,502	$ (441)	$ -	$ -	$ 38,502	$ (441)
Obligations of states and
political subdivisions	45,335	(1,784)	526	(61)	45,861	(1,845)
Corporate obligations	1,157	(2)	-	-	1,157	(2)
Equity securities in financial
institutions	139	(16)	-	-	139	(16)

Total securities	$ 85,133	$ (2,243)	$ 526	$ (61)	$ 85,659	$ (2,304)

As of June 30, 2011, the Company's investment securities portfolio contained unrealized losses on obligations of U.S Agency securities, states and political subdivisions, mortgage-backed securities in government sponsored entities and certain financial institutions equity securities. For fixed maturity investments management considers whether the present value of cash flows expected to be collected are less than the security's amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company's intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security's amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. For equity securities where the fair value has been significantly below cost for one year, the Company's policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted. The Company has concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or company-specific rating changes that are not expected to result in the non-collection of principal and interest during the period.

Proceeds from sales of securities available-for-sale for the six months ended June 30, 2011 and 2010 were $7,821,000 and $8,871,000, respectively. For the three months ended June 30, 2011 and 2010, there were sales of $4,632,000 and $3,016,000 of available-for-sale securities, respectively. There were no sales during the three month period ended June 30, 2010. The gross gains and losses were as follows (in thousands):

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Gross gains	$ 114	$ 35	$ 263	$ 99
Gross losses	-	-	(29)	-
Net gains	$ 114	$ 35	$ 234	$ 99

Investment securities with an approximate carrying value of $177,236,000 and $162,742,000 at June 30, 2011 and December 31, 2010, respectively, were pledged to secure public funds and certain other deposits.

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of debt securities at June 30, 2011, by contractual maturity, are shown below (in thousands):

	Amortized
	Cost	Fair Value
Available-for-sale debt securities:
Due in one year or less	$ 4,125	$ 4,153
Due after one year through five years	96,001	97,347
Due after five years through ten years	33,575	34,576
Due after ten years	147,399	151,200
Total	$ 281,100	$ 287,276