Note 4 - Investments

The amortized cost and fair value of investment securities at March 31, 2012 and December 31, 2011 were as follows (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
March 31, 2012	Cost		Gains		Losses			Value
Available-for-sale securities:
U.S. Agency securities	$	172,233	$	1,853	$	(456	)	$	173,630
U.S. Treasury securities		3,916		42		-			3,958
Obligations of state and political subdivisions		95,606		5,170		(10	)		100,766
Corporate obligations		10,843		328		(8	)		11,163
Mortgage-backed securities in government sponsored entities		69,293		2,330		(226	)		71,397
Equity securities in financial institutions		771		463		-			1,234
Total available-for-sale securities	$	352,662	$	10,186	$	(700	)	$	362,148

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2011	Cost		Gains		Losses			Value
Available-for-sale securities:
U.S. Agency securities	$	166,534	$	2,087	$	(21	)	$	168,600
Obligations of state and political subdivisions		96,556		4,996		(5	)		101,547
Corporate obligations		8,263		197		-			8,460
Mortgage-backed securities in government sponsored entities		36,630		2,356		(12	)		38,974
Equity securities in financial institutions		823		420		(1	)		1,242
Total available-for-sale securities	$	308,806	$	10,056	$	(39	)	$	318,823

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 March 31, 2012 and December 31, 2011 (in thousands). As of March 31, 2012, the Company owned 31 securities whose fair value was less than their cost basis, respectively.

March 31, 2012	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	$	45,982	$	(456	)	$	-	$	-	$	45,982	$	(456	)
Obligations of state and political subdivisions		520		(10	)		-		-		520		(10	)
Corporate obligations		2,611		(8	)		-		-		2,611		(8	)
Mortgage-backed securities in government sponsored entities		34,501		(226	)		-		-		34,501		(226	)

Total securities	$	83,614	$	(700	)	$	-	$	-	$	83,614	$	(700	)

December 31, 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	$	10,018	$	(21	)	$	-	$	-		$	10,018	$	(21	)
Obligations of states and political subdivisions		1,057		(3	)		771		(2	)		1,828		(5	)
Mortgage-backed securities in government sponsored entities		3,164		(12	)		-		-			3,164		(12	)
Equity securities in financial institutions		39		(1	)		-		-			39		(1	)

Total securities	$	14,278	$	(37	)	$	771	$	(2	)	$	15,049	$	(39	)

As of March 31, 2012, the Company's investment securities portfolio contained unrealized losses on agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, obligations of states and political subdivisions, corporate obligations and mortgage backed securities in government sponsored entities. 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 three months ended March 31, 2012 and 2011 were $11,236,000 and $3,189,000, respectively. The gross gains and losses were as follows (in thousands):

	Three Months Ended
	March 31,
	2012		2011
Gross gains	$	108	$	149
Gross losses		-		(29	)
Net gains	$	108	$	120

Investment securities with an approximate carrying value of $174.1 million and $177.9 million at March 31, 2012 and December 31, 2011, 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 March 31, 2012, by contractual maturity, are shown below (in thousands):

	Amortized
	Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	13,357	$	13,556
Due after one year through five years		81,125		82,641
Due after five years through ten years		59,967		60,783
Due after ten years		197,442		203,934
Total	$	351,891	$	360,914