Note 2 - Investments

6 Months Ended

Jun. 30, 2013

Investment Holdings [Text Block]

Investment Holdings [Text Block]

NOTE 2 - SECURITIES

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.

(In thousands of dollars)	Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value
June 30, 2013
Securities available for sale U.S. governmental agency	$	97,898	$	597	$	(345	)	$	98,150
States and political subdivisions		148,622		898		(1,784	)		147,736
Mortgage backed securities		60,061		1,021		(264	)		60,818
Collateralized mortgage obligations		42,182		546		(41	)		42,687
Equity and other securities		1,389		230		0			1,619
Total securities available for sale	$	350,152	$	3,292	$	(2,434	)	$	351,010
December 31, 2012
Securities available for sale U.S. governmental agency	$	105,629	$	1,271	$	(15	)	$	106,885
States and political subdivisions		116,123		1,786		(95	)		117,814
Mortgage backed securities		64,550		1,729		(2	)		66,277
Collateralized mortgage obligations		60,278		810		(58	)		61,030
Equity and other securities		1,610		62		0			1,672
Total securities available for sale	$	348,190	$	5,658	$	(170	)	$	353,678

Securities with unrealized losses at June 30, 2013 and December 31, 2012 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, 2013
U.S. governmental agency	$	36,226	$	(345	)	$	0	$	0		$	36,226	$	(345	)
States and political subdivisions		71,154		(1,726	)		3,861		(58	)		75,015		(1,784	)
Mortgage backed securities		17,242		(264	)		0		0			17,242		(264	)
Collateralized mortgage obligations		4,035		(39	)		562		(2	)		4,597		(41	)
Total temporarily impaired	$	128,657	$	(2,374	)	$	4,423	$	(60	)	$	133,080	$	(2,434	)
December 31, 2012
U.S. governmental agencies	$	10,135	$	(15	)	$	0	$	0		$	10,135	$	(15	)
States and political subdivisions		17,141		(93	)		582		(2	)		17,723		(95	)
Mortgage backed securities		0		0			513		(2	)		513		(2	)
Collateralized mortgage obligations		19,995		(55	)		721		(3	)		20,716		(58	)
Total temporarily impaired	$	47,271	$	(163	)	$	1,816	$	(7	)	$	49,087	$	(170	)

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 reflected above was due to changes in longer term interest rates for debt securities, following comments made by the chairman of the federal reserve. The value of a security moves inversely to interest rates, so as rates rose, the unrealized gain or loss in the portfolio was negatively affected. Changes in rates are typical and do not impact earnings of the company so long as investments are held to their maturity. Where unrealized losses exist, management has reviewed the issuers’ bond ratings, noting they remain 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 three months ended June 30 of 2013 and 2012.

	As of June 30,
(In thousands of dollars)	2013		2012
Trading Account Securities Gains/Losses	$	6	$	6
Available for Sale Securities
Gross realized gains		79		40
Gross realized losses		27		0
Net realized gains	$	52	$	40

The carrying value of securities at June 30, 2013, 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	$	54,876
Due after one year through five years		143,936
Due after five years through ten years		92,702
Due after ten years		57,877
Total debt securities		349,391
Equity securities		1,619
Total securities	$	351,010

At June 30, 2013 and 2012, securities with carrying values approximating $45,835,000 and $45,746,000, 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.