Note 3 - Investments

9 Months Ended

Sep. 30, 2011

Investments and Other Noncurrent Assets [Text Block]

NOTE 3 - INVESTMENTS

The following table presents information about our investment portfolio, showing the gross unrealized gains and losses within each segment of the portfolio. Unrealized gains and losses are included in other comprehensive income. Unrealized losses have been analyzed and determined to be temporary in nature. The unrealized losses are related to changes in the interest rate environment compared with rates at the time the securities were purchased.

(Dollars in Thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value
September 30, 2011
Securities available for sale
Treasury Notes	$	0	$	0	$	0		$	0
U.S. Government Agency Bonds		114,360		1,379		(29	)		115,710
U.S. Government Agency CMOs		131,225		2,173		(201	)		133,197
Municipal Securities		68,538		1,008		(78	)		69,468
Other Securities		1,596		58		0			1,654
Total Securities available for sale	$	315,719	$	4,618	$	(308	)	$	320,029
December 31, 2010
Securities available for sale
Treasury Notes	$	12,513	$	17	$	0		$	12,530
U.S. Government Agency Bonds		82,395		632		(130	)		82,897
U.S. Government Agency CMOs		110,645		591		(694	)		110,542
Municipal Securities		48,278		255		(446	)		48,087
Other Securities		1,650		0		(3	)		1,647
Total Securities available for sale	$	255,481	$	1,495	$	(1,273	)	$	255,703

Securities with unrealized losses at September 30, 2011 and year end 2010 not recognized in income are as follows:

(In Thousands of Dollars)	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair  Value		Unrealized Loss
September 30, 2011
US Government Agencies	$	6,471	$	(29	)	$	0	$	0		$	6,471	$	(29	)
States and Political Subdivisions		10,251		(62	)		1,914		(16	)		12,165		(78	)
Collateralized Mortgage Obligations		17,829		(200	)		622		(1	)		18,451		(201	)
Equity Securities		0		0			0		(0	)		0		(0	)
Total Temporarily Impaired	$	34,551	$	(292	)	$	2,536	$	(16	)	$	37,088	$	(308	)
December 31, 2010
US Government Agencies	$	12,750	$	(130	)	$	0	$	0		$	12,750	$	(130	)
States and Political Subdivisions		19,284		(245	)		4,883		(201	)		24,167		(446	)
Collateralized Mortgage Obligations		65,378		(694	)		0		0			65,378		(694	)
Equity Securities		0		0			31		(3	)		31		(3	)
Total Temporarily Impaired	$	97,412	$	(1,069	)	$	4,914	$	(204	)	$	102,326	$	(1,273	)

Unrealized losses on securities shown in the previous tables have not been recognized into income because management has the intent and ability to hold these securities for the foreseeable future. The decline in market value is due to changes in interest rates for debt securities and considered normal market fluctuations for equity securities. Management has also reviewed the issuers’ bond ratings, noting they are of high credit quality.

Trading account securities are marked to market with the change in value reported on the income statement. Gains and losses on available for sale securities are recognized if the security is either deemed to be other than temporarily impaired, or the security is sold. Due to continuing problems within one equity security in the third quarter of 2010, we recorded other than temporary impairment of $150,000 bringing the carrying value of that security to zero. This security was a trust preferred security of a Michigan bank that had an original book value of $250,000. The following table shows gross gains and losses on investment securities for the nine months ended September 30 of 2011 and 2010.

	As of September 30,
(In Thousands of Dollars)	2011			2010
Trading Account Securities Gains/Losses	$	8		$	13
Available for Sale Securities
Gross realized gains		28			197
Gross realized losses		(29	)		(187	)
Net realized gains (losses)	$	(1	)	$	10

The carrying value of securities at September 30, 2011, by stated maturity, is shown below. Actual maturities may differ from stated maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In Thousands of Dollars)	Carrying Value
Due in one year or less	$	85,691
Due after one year through five years		142,693
Due after five years through ten years		73,305
Due after ten years		17,186
Total debt securities		318,875
Equity securities		1,154
Total securities	$	320,029

At September 30, 2011 and 2010, securities with carrying values approximating $49,958,000 and $47,777,000 were pledged to secure public trust deposits, securities sold under agreements to repurchase, and for such other purposes as required or permitted by law.

Federal Home Loan Bank stock is carried at cost, which approximates fair value.