Note 2 - Investments

6 Months Ended

Jun. 30, 2012

Investment Holdings [Text Block]

NOTE 2 - 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
June 30, 2012
Securities available for sale
U.S. governmental agency	$	117,782	$	1,347	$	0		$	119,129
States and political subdivisions		81,060		1,679		(30	)		82,709
Mortgage backed securities		65,957		1,735		(1	)		67,691
Collateralized mortgage obligations		54,572		933		(18	)		55,487
Equity and other securities		1,591		66		0			1,657
Total securities available for sale	$	320,962	$	5,760	$	(49	)	$	326,673
December 31, 2011
Securities available for sale
U.S. governmental agency	$	132,534	$	1,325	$	(25	)	$	133,834
States and political subdivisions		76,574		1,238		(23	)		77,789
Mortgage backed securities		70,059		1,080		(87	)		71,052
Collateralized mortgage obligations		57,006		854		(15	)		57,845
Equity and other securities		1,606		58		0			1,664
Total securities available for sale	$	337,779	$	4,555	$	(150	)	$	342,184

Securities with unrealized losses at June 30, 2012 and December 31, 2011 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
June 30, 2012
US governmental agency	$	0	$	0		$	0	$	0		$	0	$	0
States and political subdivisions		3,902		(25	)		587		(5	)		4,489		(30	)
Mortgage backed securities		627		(1	)		0		0			627		(1	)
Collateralized mortgage obligations		2,416		(7	)		3,512		(11	)		5,928		(18	)
Total temporarily impaired	$	6,945	$	(33	)	$	4,099	$	(16	)	$	11,044	$	(49	)
December 31, 2011
US governmental agencies	$	17,974	$	(25	)	$	0	$	0		$	17,974	$	(25	)
States and political subdivisions		5,987		(23	)		0		0			5,987		(23	)
Mortgage backed securities		18,091		(87	)		0		0			18,091		(87	)
Collateralized mortgage obligations		5,703		(11	)		887		(4	)		6,590		(15	)
Total temporarily impaired	$	47,755	$	(146	)	$	887	$	(4	)	$	48,642	$	(150	)

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. The following table shows gross gains and losses on investment securities for the six months ended June 30 of 2012 and 2011.

	As of June 30,
(In Thousands of Dollars)	2012		2011
Trading Account Securities Gains/Losses	$	6	$	8
Available for Sale Securities
Gross realized gains		40		19
Gross realized losses		0		(29	)
Net realized gains (losses)	$	40	$	(10	)

The carrying value of securities at June 30, 2012, 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	$	29,276
Due after one year through five years		152,035
Due after five years through ten years		68,406
Due after ten years		75,299
Total debt securities		325,016
Equity securities		1,657
Total securities	$	326,673

At June 30, 2012 and 2011, securities with carrying values approximating $45,746,000 and $46,304,000, respectively, 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.