Securities

3 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Text Block]

4. Securities

The following table summarizes the Corporation’s securities as of March 31, 2013 and December 31, 2012:

(Dollar amounts in thousands)			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale:
March 31, 2013:
U.S. Treasury and federal agency	$	4,953	$	13	$	(19	)	$	4,947
U.S. government sponsored entities and agencies		26,539		71		(2	)		26,608
Mortgage-backed securities: residential		17,691		1,260		-			18,951
Collateralized mortgage obligations: residential		23,715		31		(97	)		23,649
State and political subdivisions		34,567		1,774		-			36,341
Corporate debt securities		3,475		41		-			3,516
Equity securities		2,357		78		(12	)		2,423
	$	113,297	$	3,268	$	(130	)	$	116,435
December 31, 2012:
U.S. Treasury and federal agency	$	3,959	$	8	$	-		$	3,967
U.S. government sponsored entities and agencies		28,030		132		-			28,162
Mortgage-backed securities: residential		21,137		1,587		-			22,724
Collateralized mortgage obligations: residential		22,508		47		(80	)		22,475
State and political subdivisions		34,904		1,862		(1	)		36,765
Corporate debt securities		3,728		34		(1	)		3,761
Equity securities		2,356		4		(8	)		2,352
	$	116,622	$	3,674	$	(90	)	$	120,206

The following table summarizes scheduled maturities of the Corporation’s debt securities as of March 31, 2013. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are not due at a single maturity and are shown separately.

(Dollar amounts in thousands)	Available for sale
	Amortized		Fair
	Cost		Value
Due in one year or less	$	1,493	$	1,507
Due after one year through five years		25,962		26,386
Due after five through ten years		32,637		33,963
Due after ten years		9,443		9,556
Mortgage-backed securities: residential		17,691		18,951
Collateralized mortgage obligations: residential		23,715		23,649
	$	110,941	$	114,012

Information pertaining to securities with gross unrealized losses at March 31, 2013 and December 31, 2012, aggregated by investment category and length of time that individual securities have been in a continuous loss position are included in the table below:

(Dollar amounts in thousands)	Less than 12 Months					12 Months or More				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss		Value		Loss
March 31, 2013:
U.S. Treasury and federal agency	$	483	$	(19	)	$	-	$	-	$	483	$	(19	)
U.S. government sponsored entities and agencies		3,205		(2	)		-		-		3,205	$	(2	)
Collateralized mortgage obligations: residential		17,383		(97	)		-		-		17,383	$	(97	)
Equity securities		1,200		(12	)		-		-		1,200		(12	)
	$	22,271	$	(130	)	$	-	$	-	$	22,271	$	(130	)
December 31, 2012:
Collateralized mortgage obligations: residential	$	10,698	$	(80	)	$	-	$	-	$	10,698	$	(80	)
State and political subdivisions		521		(1	)		-		-		521		(1	)
Corporate debt securities		500		(1	)		-		-		500		(1	)
Equity securities		493		(8	)		-		-		493		(8	)
	$	12,212	$	(90	)	$	-	$	-	$	12,212	$	(90	)

Gains on sales of available for sale securities for the three month period ended March 31 were as follows:

(Dollar amounts in thousands)	For the three months
	ended March 31,
	2013		2012
Proceeds	$	1,775	$	1,112
Gains		85		424
Tax provision related to gains		29		144

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic, market or other conditions warrant such evaluation. Consideration is given to: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions and (4) whether the Corporation has the intent to sell the debt security or more likely than not will be required to sell the debt security before recovery of its amortized cost basis. If the Corporation intends to sell an impaired security, or if it is more likely than not the Corporation will be required to sell the security before its anticipated recovery, the Corporation records an other-than-temporary loss in an amount equal to the entire difference between fair value and amortized cost. Otherwise, only the credit portion of the estimated loss on debt securities is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. For equity securities determined to be other-than-temporarily impaired, the entire amount of impairment is recognized through earnings.

There were two equity securities in an unrealized loss position as of March 31, 2013, both of which were in an unrealized loss position for less than 12 months. Equity securities owned by the Corporation consist of common stock of various financial service providers. These investment securities are in an unrealized loss position as a result of recent market volatility and depressed pricing of the financial services sector. The Corporation does not invest in these securities with the intent to sell them for a profit in the near term. For investments in equity securities, in addition to the general factors mentioned above for determining whether the decline in market value is other-than-temporary, the analysis of whether an equity security is other-than-temporarily impaired includes a review of the profitability and capital adequacy and all other relevant information available to determine the financial position and near term prospects of each issuer. The results of analyzing the aforementioned metrics and financial fundamentals suggest recovery of amortized cost as the sector improves. Based on that evaluation, and given that the Corporation’s current intention is not to sell any impaired securities and it is more likely than not it will not be required to sell these securities before the recovery of its amortized cost basis, the Corporation does not consider the equity securities with unrealized losses as of March 31, 2013 to be other-than-temporarily impaired.

There were 16 debt securities in an unrealized loss position as of March 31, 2013, all of which were in an unrealized loss position for less than 12 months. Of these securities, 12 were collateralized mortgage obligations, three were U.S. agency securities and one was a U.S. Treasury security. The unrealized losses associated with these securities were not due to the deterioration in the credit quality of the issuer that is likely to result in the failure to collect contractual principal and interest, but rather have been caused by a rise in interest rates from the time the securities were purchased. Based on that evaluation and other general considerations, and given that the Corporation’s current intention is not to sell any impaired securities and it is more likely than not it will not be required to sell these securities before the recovery of its amortized cost basis, the Corporation does not consider the debt securities with unrealized losses as of March 31, 2013 to be other-than-temporarily impaired.