Securities

12 Months Ended

Dec. 31, 2011

Investments, Debt and Equity Securities [Abstract]

Securities [Text Block]

NOTE 3 - SECURITIES

Balances of securities by category are shown below, as of December 31, 2011 and 2010:

Thousands of dollars	Securities Available for Sale
2011	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Treasury and agency securities	$	48,999	$	385	$	(18	)	$	49,366
Mortgage backed agency securities		101,855		1,321		(479	)		102,697
Obligations of states and political subdivisions		19,690		1,287		-			20,977
Corporate, asset backed and other debt securities		126		-		-			126
Equity securities		26		5		-			31
Total	$	170,696	$	2,998	$	(497	)	$	173,197

2010
U.S. Treasury and agency securities	$	33,897	$	157	$	(367	)	$	33,687
Mortgage backed agency securities		65,714		821		(437	)		66,098
Obligations of states and political subdivisions		23,841		817		(53	)		24,605
Corporate, asset backed and other debt securities		126		-		-			126
Equity securities		26		2		-			28
Total	$	123,604	$	1,797	$	(857	)	$	124,544

The following table shows the gross unrealized loss and fair value of the Company's investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011 and 2010.

	Less than 12 Months					12 Months or Longer					Total
Thousands of dollars	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
2011
U.S. Treasury and agency securities	$	5,101	$	(18	)	$	-	$	-		$	5,101	$	(18	)
Mortgage backed agency securities		36,420		(424	)		5,764		(55	)		42,184		(479	)
Total	$	41,521	$	(442	)	$	5,764	$	(55	)	$	47,285	$	(497	)

	Less than 12 Months					12 Months or Longer				Total
In thousands of dollars	Fair Value		Losses			Fair Value		Losses		Fair Value		Losses
2010
U.S. Treasury and agency securities	$	22,677	$	(367	)	$	-	$	-	$	22,677	$	(367	)
Mortgage backed agency securities		35,933		(437	)		-		-		35,933		(437	)
Obligations of states and political subdivisions		2,214		(53	)		-		-		2,214		(53	)
Total	$	60,824	$	(857	)	$	-	$	-	$	60,824	$	(857	)

Unrealized losses within the investment portfolio are determined to be temporary. The Company has performed an evaluation of its investments for other than temporary impairment, and no losses were recognized during 2011 or 2010. Loss from other than temporary impairment for 2009 consisted of write-down of one equity security that was deemed to be impaired.

The unrealized losses on the Company’s investments in direct obligations of U.S. government agencies were caused by interest rate changes. The contractual terms of those investments 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, 2011.

The unrealized losses on the Company’s investment in residential mortgage-backed securities were caused by interest rate changes. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value is attributable to changes in interest rates and not credit quality, and 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, 2011.

The entire investment portfolio is classified as available for sale. However, management has no specific intent to sell any securities, and management believes that it is more likely than not that the Company will not have to sell any security before recovery of its cost basis. Sales activities for securities for the years indicated are shown in the following table. All sales were of securities identified as available for sale.

Thousands of dollars	2011		2010			2009
Sales proceeds	$	-	$	4,376		$	-
Gross gains on sales		-		38			-
Gross loss on sales		-		(7	)		-
Loss from other than temporary impairment		-		-			(24	)

The fair value of securities available for sale by contractual maturity as of December 31, 2011 is shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities are included in the “Due in one year or less” category.

Thousands of dollars	Amortized Cost		Fair Value
Due in one year or less	$	31,166	$	31,445
Due after one year through five years		135,985		137,814
Due after five years through ten years		3,034		3,343
Due after ten years		485		564
Equity securities		26		31
Total securities	$	170,696	$	173,197

Securities carried at $3,060,000 and $4,857,000 as of December 31, 2011 and 2010, respectively, were pledged to secure deposits of public funds, funds borrowed, repurchase agreements, and for other purposes as required by law.