NOTE 2 –SECURITIES

Amortized cost and fair value of investment securities, by category, at March 31, 2014 are summarized as follows:

2014	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	38,680	$	513	$	(174	)	$	39,019
U. S. sponsored agency CMO’s - residential		170,243		2,586		(1,371	)		171,458
Total mortgage-backed securities of government sponsored agencies		208,923		3,099		(1,545	)		210,477
U. S. government sponsored agency securities		7,051		33		(70	)		7,014
Obligations of states and political subdivisions		6,266		254		-			6,520
Total available for sale	$	222,240	$	3,386	$	(1,615	)	$	224,011

Amortized cost and fair value of investment securities, by category, at December 31, 2013 are summarized as follows:

2013	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	27,681	$	463	$	(321	)	$	27,823
U. S. sponsored agency CMO’s - residential		178,000		1,167		(2,445	)		176,722
Total mortgage-backed securities of government sponsored agencies		205,681		1,630		(2,766	)		204,545
U. S. government sponsored agency securities		7,058		30		(107	)		6,981
Obligations of states and political subdivisions		6,275		265		-			6,540
Total available for sale	$	219,014	$	1,925	$	(2,873	)	$	218,066

The amortized cost and fair value of securities at March 31, 2014 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	$	1,155	$	1,159
Due after one year through five years		8,165		8,448
Due after five years through ten years		3,997		3,927
Mortgage-backed securities of government sponsored agencies		208,923		210,477
Total available for sale	$	222,240	$	224,011

A $148,000 gain was recognized from calls of securities during the first three months of 2013. There were no sales of securities during the first three months of 2014 nor the first three months of 2013.

Securities with unrealized losses at March 31, 2014 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	$	3,927	$	(70	)	$	-	$	-		$	3,927	$	(70	)
U.S government sponsored agency MBS – residential		23,901		(174	)		-		-			23,901		(174	)
U.S government sponsored agency CMO – residential		43,845		(1,267	)		2,661		(104	)		46,506		(1,371	)
Total temporarily impaired	$	71,673	$	(1,511	)	$	2,661	$	(104	)	$	74,334	$	(1,615	)

Securities with unrealized losses at December 31, 2013 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	$	3,890	$	(107	)	$	-	$	-	$	3,890	$	(107	)
U.S government sponsored agency MBS’s – residential		13,797		(321	)		-		-		13,797		(321	)
U.S government sponsored agency CMO’s – residential		102,341		(2,445	)		-		-		102,341		(2,445	)
Total temporarily impaired	$	120,028	$	(2,873	)	$	-	$	-	$	120,028	$	(2,873	)

The investment portfolio is predominately high quality interest-bearing debt securities with defined maturity dates backed by the U.S. Government or Government sponsored entities. The unrealized losses at March 31, 2014 and December 31, 2013 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.