Note 2 - Securities

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

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:

	June 30, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government agencies and corporations	$	23,069	$	2	$	(1,312	)	$	21,759
Mortgage-backed securities		3,222		33		(100	)		3,155
Obligations of states and political subdivisions		117,905		5,058		(547	)		122,416
Preferred stock		27		231		—			258
	$	144,223	$	5,324	$	(1,959	)	$	147,588

	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 June 30, 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.

	June 30, 2013
(Dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	28,829	$	28,338
Due after one year through five years		39,349		40,738
Due after five years through ten years		49,852		50,997
Due after ten years		26,166		27,257
Preferred stock		27		258
	$	144,223	$	147,588

Proceeds from the maturities, calls and sales of securities available for sale for the six months ended June 30, 2013 were $15.36 million.

The Corporation pledges securities primarily as collateral for public deposits and repurchase agreements. Securities with an aggregate amortized cost of $110.37 million and an aggregate fair value of $113.03 million were pledged at June 30, 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 June 30, 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	$	20,628	$	1,312	$	—	$	—	$	20,628	$	1,312
Mortgage backed securities		2,080		100		—		—		2,080		100
Obligations of states and political subdivisions		13,051		511		816		36		13,867		547
Total temporarily impaired securities	$	35,759	$	1,923	$	816	$	36	$	36,575	$	1,959

There are 88 debt securities with fair values totaling $36.6 million considered temporarily impaired at June 30, 2013. The primary cause of the temporary impairments in the Corporation's investments in debt securities was fluctuations in interest rates.  During the second quarter of 2013, the municipal bond sector, which is included in the Corporation's obligations of states and political subdivisions category of securities, and securities of U.S. government agencies and corporations experienced falling securities prices as improvement in select U.S. economic indicators and statements made by certain Federal Reserve officials raised concerns that the Federal Reserve would reduce its efforts to stimulate economic recovery through its bond-buying program known as "quantitative easing." Interest rates rose during the second quarter of 2013, causing corresponding unrealized losses on the Corporation's portfolio of securities of U.S. government agencies and corporations and obligations of states and political subdivisions. 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 June 30, 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 96 percent were rated, as measured by market value, “A” or better at June 30, 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 June 30, 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 June 30, 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 June 30, 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.