NOTE 4 –SECURITIES

Amortized cost and fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

2012	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	35,172	$	1,928	$	-		$	37,100
U. S. sponsored agency CMO's - residential		206,466		6,392		(11	)		212,847
Total mortgage-backed securities of government sponsored agencies		241,638		8,320		(11	)		249,947
U. S. government sponsored agency securities		22,062		182		-			22,244
Obligations of states and political subdivisions		7,419		441		-			7,860
Other securities		2,892		1,105		(73	)		3,924
Total available for sale	$	274,011	$	10,048	$	(84	)	$	283,975

2011	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	38,403	$	1,856	$	(4	)	$	40,255
U. S. sponsored agency CMO's - residential		200,835		4,933		(30	)		205,738
Total mortgage-backed securities of government sponsored agencies		239,238		6,789		(34	)		245,993
U. S. government sponsored agency securities		18,114		58		(31	)		18,141
Obligations of states and political subdivisions		9,193		457		-			9,650
Other securities		4,338		440		(83	)		4,695
Total available for sale	$	270,883	$	7,744	$	(148	)	$	278,479

The amortized cost and fair value of securities at December 31, 2012 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Available for sale
Due in one year or less	$	726	$	682
Due after one year through five years		19,613		20,117
Due after five years through ten years		9,712		9,829
Due after ten years		1,230		1,824
Corporate preferred securities		1,092		1,576
Mortgage-backed securities of government sponsored agencies		241,638		249,947
Total available for sale	$	274,011	$	283,975

A $545 gain was recognized from calls of securities in 2012 while an $18 gain was recognized from calls in 2011. There were no sales of securities in 2012, 2011 or 2010.

Securities with an approximate carrying value of $173,015 and $147,496 at December 31, 2012 and 2011 were pledged to secure public deposits, trust funds, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

Securities with unrealized losses at year-end 2012 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss

U.S government sponsored agency CMO's – residential	$	2,077	$	(11	)	$	-	$	-		$	2,077	$	(11	)
Other securities		-		-			4		(73	)		4		(73	)

Total temporarily impaired	$	2,077	$	(11	)	$	4	$	(73	)	$	2,081	$	(84	)

Securities with unrealized losses at year-end 2011 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less than 12 Months					12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

U.S. government sponsored agency securities	$	7,080	$	(31	)	$	-	$	-	$	7,080	$	(31	)
U.S government sponsored agency MBS – residential		2,544		(4	)		-		-		2,544		(4	)
U.S government sponsored agency CMO – residential		3,941		(30	)		-		-		3,941		(30	)
Other securities		370		(83	)		-		-		370		(83	)

Total temporarily impaired	$	13,935	$	(148	)	$	-	$	-	$	13,935	$	(148	)

The investment portfolio is predominately high quality interest-bearing bonds with defined maturity dates backed by the U.S. Government or Government sponsored entities. The unrealized losses at December 31, 2012 and December 31, 2011 are price changes resulting from changes in the interest rate environment and are considered to be temporary declines in the value of the securities. Their fair value is expected to recover as the bonds approach their maturity date and/or market conditions improve.