Note 2 - Securities

3 Months Ended

Mar. 31, 2013

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

NOTE 2: Securities

Debt and equity securities, all of which were classified as available for sale, are summarized as follows:

	March 31, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government agencies and corporations	$	26,035	$	5	$	(118	)	$	25,922
Mortgage-backed securities		1,899		56		—			1,955
Obligations of states and political subdivisions		114,231		8,336		(111	)		122,456
Preferred stock		27		161		—			188
	$	142,192	$	8,558	$	(229	)	$	150,521

	December 31, 2012
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government agencies and corporations	$	24,628	$	24	$	(3	)	$	24,649
Mortgage-backed securities		2,127		62		—			2,189
Obligations of states and political subdivisions		116,879		9,069		(73	)		125,875
Preferred stock		27		77		—			104
	$	143,661	$	9,232	$	(76	)	$	152,817

The amortized cost and estimated fair value of securities, all of which were classified as available for sale, at March 31, 2013, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

	March 31, 2013
(Dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	31,036	$	31,272
Due after one year through five years		39,805		42,011
Due after five years through ten years		45,669		49,147
Due after ten years		25,655		27,903
Preferred stock		27		188
	$	142,192	$	150,521

Proceeds from the maturities, calls and sales of securities available for sale for the three months ended March 31, 2013 were $7.18 million.

The Corporation pledges securities primarily as collateral for public deposits and repurchase agreements. Securities with an aggregate amortized cost of $112.18 million and an aggregate fair value of $118.96 million were pledged at March 31, 2013. Securities with an aggregate amortized cost of $107.87 million and an aggregate fair value of $115.14 million were pledged at December 31, 2012.

Securities in an unrealized loss position at March 31, 2013, by duration of the period of the unrealized loss, are shown below.

	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government agencies and corporations	$	17,033	$	118	$	—	$	—	$	17,033	$	118
Obligations of states and political subdivisions		5,228		106		787		5		6,015		111
Total temporarily impaired securities	$	22,261	$	224	$	787	$	5	$	23,048	$	229

There are 43 debt securities with fair values totaling $23.05 million considered temporarily impaired at March 31, 2013. The primary cause of the temporary impairments in the Corporation's investments in debt securities was fluctuations in interest rates.  During the first quarter of 2013, the municipal bond sector, which is included in the Corporation's obligations of states and political subdivisions category of securities, experienced falling securities prices due to the seasonal trend of tempered demand and light supply, along with an increase in Treasury rates. The vast majority of the Corporation's municipal bond portfolio is made up of securities where the issuing municipalities have unlimited taxing authority to support their debt service obligations. At March 31, 2013, approximately 97 percent of the Corporation's obligations of states and political subdivisions, as measured by market value, were rated “A” or better by Standard & Poor's or Moody's Investors Service. Of those in a net unrealized loss position, approximately 84 percent were rated, as measured by market value, “A” or better at March 31, 2013. Because the Corporation intends to hold these investments in debt securities to maturity and it is more likely than not that the Corporation will not be required to sell these investments before a recovery of unrealized losses, the Corporation does not consider these investments to be other-than-temporarily impaired at March 31, 2013 and no other-then-temporary impairment has been recognized.

Securities in an unrealized loss position at December 31, 2012, by duration of the period of the unrealized loss, are shown below.

	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government agencies and corporations	$	5,479	$	3	$	—	$	—	$	5,479	$	3
Obligations of states and political subdivisions		5,804		71		263		2		6,067		73
Total temporarily impaired securities	$	11,283	$	74	$	263	$	2	$	11,546	$	76

The Corporation’s investment in Federal Home Loan Bank (FHLB) stock totaled $3.53 million at March 31, 2013 and $3.74 million at December 31, 2012. FHLB stock is generally viewed as a long-term investment and as a restricted investment security, which is carried at cost, because there is no market for the stock, other than the FHLBs or member institutions. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Corporation does not consider this investment to be other-than-temporarily impaired at March 31, 2013 and no impairment has been recognized. FHLB stock is shown as a separate line item on the balance sheet and is not a part of the available for sale securities portfolio.