Note 3 - Securities

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

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

NOTE 3: Securities

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

	March 31, 2014
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government agencies and corporations	$	44,306	$	66	$	(1,705	)	$	42,667
Mortgage-backed securities		39,114		242		(203	)		39,153
Obligations of states and political subdivisions		124,807		5,597		(425	)		129,979
	$	208,227	$	5,905	$	(2,333	)	$	211,799

	December 31, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	$	10,000	$	—	$	—		$	10,000
U.S. government agencies and corporations		32,503		4		(2,557	)		29,950
Mortgage-backed securities		51,318		100		(555	)		50,863
Obligations of states and political subdivisions		123,729		4,223		(813	)		127,139
Corporate and other debt securities		158		—		—			158
	$	217,708	$	4,327	$	(3,925	)	$	218,110

The amortized cost and estimated fair value of securities, all of which were classified as available for sale, at March 31, 2014, 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, 2014
(Dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	27,461	$	26,769
Due after one year through five years		64,297		66,722
Due after five years through ten years		40,314		41,108
Due after ten years		76,155		77,200
	$	208,227	$	211,799

Proceeds from the maturities, calls and sales of securities available for sale for the three months ended March 31, 2014 were $16.59 million.

The Corporation pledges securities primarily as collateral for public deposits and repurchase agreements. Securities with an aggregate amortized cost of $79.80 million and an aggregate fair value of $81.65 million were pledged at March 31, 2014. Securities with an aggregate amortized cost of $149.22 million and an aggregate fair value of $149.83 million were pledged at December 31, 2013.

Securities in an unrealized loss position at March 31, 2014, 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	$	22,889	$	728	$	12,181	$	977	$	35,070	$	1,705
Mortgage backed securities		18,233		203		—		—		18,233		203
Obligations of states and political subdivisions		11,753		233		4,620		192		16,373		425
Total temporarily impaired securities	$	52,875	$	1,164	$	16,801	$	1,169	$	69,676	$	2,333

There are 109 debt securities with fair values totaling $69.7 million considered temporarily impaired at March 31, 2014. The primary cause of the temporary impairments in the Corporation's investments in debt securities was fluctuations in interest rates. Interest rates fell during the first quarter of 2014, primarily in the middle and long-end of the United States Treasury yield curve, thereby reducing unrealized losses on the Corporation's portfolio of securities of U.S. government agencies and corporations and obligations of states and political subdivisions. Slower than expected domestic economic growth, coupled with the expressed intent of the Federal Open Market Committee chairman to keep monetary policy accommodative, helped to reverse the negative fixed income trends that prevailed throughout 2013. The municipal bond sector, which is included in the Corporation's obligations of states and political subdivisions category of securities, experienced improved performance driven by declining interest rates across most of the yield curve, improved fundamental credit quality and favorable market technical factors, as demand for municipal bonds outpaced supply throughout the quarter. At March 31, 2014, 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 98 percent were rated, as measured by market value, “A” or better at March 31, 2014. For the approximate two percent not rated "A" (or equivalent) or better, as measured by market value at March 31, 2014, the Corporation considers these to meet regulatory credit quality standards, such that the securities have low risk of default by the obligor, and the full and timely repayment of principal and interest is anticipated over the expected life of the investment. 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, 2014 and no other-then-temporary impairment has been recognized.

Securities in an unrealized loss position at December 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	$	29,430	$	1,385	$	8,948	$	1,172	$	38,378	$	2,557
Mortgage-backed securities		40,090		555		—		—	$	40,090	$	555
Obligations of states and political subdivisions		21,260		656		3,078		157		24,338		813
Total temporarily impaired securities	$	90,780	$	2,596	$	12,026	$	1,329	$	102,806	$	3,925

The Corporation’s investment in restricted stocks includes membership stock in the Federal Home Loan Bank (FHLB) and the Community Bankers Bank at March 31, 2014, and additionally included stock in the Federal Reserve Bank at December 31, 2013. Restricted stocks totaled $3.69 million at March 31, 2014 and $4.34 million at December 31, 2013. These membership stocks are generally viewed as long-term investments and as a restricted investment securities, which are carried at cost, because there is no market for the stock, other than member institutions. Therefore, when evaluating these investments for impairment, their value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Corporation does not consider these investments to be other-than-temporarily impaired at March 31, 2014 and no impairment has been recognized. These stocks are shown as a separate line item on the balance sheet and are not a part of the available for sale securities portfolio.