Note 3 - Investment Securities

3 Months Ended

Mar. 31, 2013

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 3: INVESTMENT SECURITIES

The amortized cost and fair value of investment securities that are classified as held-to-maturity and available-for-sale are as follows:

	March 31,2013									December 31,2012
(In thousands)	Amortized Cost		Gross Unrealized Gains		GrossUnrealized (Losses)			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		GrossUnrealized (Losses)			Estimated Fair Value
Held-to-Maturity
U.S. Government agencies	$	288,480	$	72	$	(1,067	)	$	287,485	$	288,098	$	135	$	(679	)	$	287,554
Mortgage-backed securities		45		2		--			47		49		1		--			50
State and political subdivisions		199,368		4,305		(269	)		203,404		207,374		5,140		(160	)		212,354
Other securities		620		--		--			620		620		--		--			620
	$	488,513	$	4,379	$	(1,336	)	$	491,556	$	496,141	$	5,276	$	(839	)	$	500,578
Available-for-Sale
U.S. Government agencies	$	160,394	$	33	$	(581	)	$	159,846	$	152,708	$	65	$	(292	)	$	152,481
Mortgage-backed securities		15,768		247		(124	)		15,891		20,436		287		(89	)		20,634
State and political subdivisions		1,417		--		--			1,417		2,989		--		(1	)		2,988
Other securities		14,513		501		(3	)		15,011		14,787		456		(4	)		15,239
	$	192,092	$	781	$	(708	)	$	192,165	$	190,920	$	808	$	(386	)	$	191,342

Certain investment securities are valued at less than their historical cost.  These declines primarily resulted from the rate for these investments yielding less than current market rates.  Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary.  Management does not have the intent to sell these securities and management believes it is more likely than not the Company will not have to sell these securities before recovery of their amortized cost basis less any current period credit losses.  Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

As of March 31, 2013, securities with unrealized losses, segregated by length of impairment, were as follows:

	Less Than 12 Months					12 Months or More					Total
(In thousands)	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Held-to-Maturity
U.S. Government agencies	$	218,773	$	(1,067	)	$	--	$	--		$	218,773	$	(1,067	)
State and political subdivisions		18,592		(218	)		549		(51	)		19,141		(269	)
Total	$	237,365	$	(1,285	)	$	549	$	(51	)	$	237,914	$	(1,336	)
Available-for-Sale
U.S. Government agencies	$	129,704	$	(581	)	$	--	$	--		$	129,704	$	(581	)
Mortgage-backed securities		13,246		(123	)		22		(1	)		13,268		(124	)
State and political subdivisions		827		--			--		--			827		--
Other securities		2		(3	)		--		--			2		(3	)
Total	$	143,779	$	(707	)	$	22	$	(1	)	$	143,801	$	(708	)

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses.  In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company expects to receive full value for the securities.  Furthermore, as of March 31, 2013, management also had the ability and intent to hold the securities classified as available-for-sale for a period of time sufficient for a recovery of cost.  The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.  The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline.  Management does not believe any of the securities are impaired due to reasons of credit quality.  Accordingly, as of March 31, 2013, management believes the impairments detailed in the table above are temporary.

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $438.6 million at March 31, 2013, and $434.8 million at December 31, 2012.

The book value of securities sold under agreements to repurchase equaled $60.2 million and $58.8 million for March 31, 2013, and December 31, 2012, respectively.

Income earned on securities for the three months ended March 31, 2013 and 2012, is as follows:

(In thousands)	2013		2012
Taxable:
Held-to-maturity	$	702	$	852
Available-for-sale		519		526
Non-taxable:
Held-to-maturity		1,675		1,897
Available-for-sale		6		--
Total	$	2,902	$	3,275

Maturities of investment securities at March 31, 2013, are as follows:

	Held-to-Maturity				Available-for-Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	26,541	$	26,720	$	510	$	510
After one through five years		205,153		205,459		75,246		75,341
After five through ten years		190,784		191,456		88,452		88,056
After ten years		66,035		67,921		13,371		13,247
Other securities		--		--		14,513		15,011
Total	$	488,513	$	491,556	$	192,092	$	192,165

There were no realized gains or losses on investment securities for the three months ended March 31, 2013 or 2012.

The state and political subdivision debt obligations are primarily non-rated bonds and represent small, Arkansas issues, which are evaluated on an ongoing basis.