Note 8 - Securities Available For Sale

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

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

(8) Securities Available For Sale

The following table shows the gross unrealized losses and fair value for the securities available for sale portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2013 and December 31, 2012.

	September 30, 2013
	Less than twelve months							Twelve months or more							Total
(Dollars in thousands)	# of Investments		Fair Value		Unrealized Losses			# of Investments		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Other marketable securities:
U.S. Government agency obligations		15	$	68,386		(643	)		0	$	0		0		$	68,386		(643	)
Corporate preferred stock		0		0		0			1		245		(455	)		245		(455	)
Total temporarily impaired securities		15	$	68,386		(643	)		1	$	245		(455	)	$	68,631		(1,098	)

	December 31, 2012
	Less than twelve months							Twelve months or more							Total
(Dollars in thousands)	# of Investments		Fair Value		Unrealized Losses			# of Investments		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Other marketable securities:
U.S. Government agency obligations		1	$	4,996		(4	)		0	$	0		0		$	4,996		(4	)
Corporate preferred stock		0		0		0			1		245		(455	)		245		(455	)
Total temporarily impaired securities		1	$	4,996		(4	)		1	$	245		(455	)	$	5,241		(459	)

We review our investment portfolio on a quarterly basis for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the market liquidity for the investment, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, and our intent and ability to hold the investment for a period of time sufficient to recover the temporary loss.

The unrealized losses reported for corporate preferred stock at September 30, 2013 related to a single trust preferred security that was issued by the holding company of a small community bank. Typical of most trust preferred issuances, the issuer has the ability to defer interest payments for up to five years with interest payable on the deferred balance. In October 2009, the issuer elected to defer its scheduled interest payments as allowed by the terms of the security agreement. The issuer’s subsidiary bank has incurred operating losses due to increased provisions for loan losses but still meets the regulatory requirements to be considered “well capitalized” based on its most recent regulatory filing. Based on a review of the issuer, it was determined that the trust preferred security was not other-than-temporarily impaired at September 30, 2013. The Company does not intend to sell the preferred stock and has the intent and ability to hold it for a period of time sufficient to recover the temporary loss. Management believes that the Company will receive all principal and interest payments contractually due on the security and that the decrease in the market value is primarily due to a lack of liquidity in the market for trust preferred securities and the deferral of interest by the issuer. Management will continue to monitor the credit risk of the issuer and may be required to recognize other-than-temporary impairment charges on this security in future periods.

A summary of securities available for sale at September 30, 2013 and December 31, 2012 is as follows:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
September 30, 2013:
Mortgage-backed securities:
FHLMC	$	2,431		144		0			2,575
FNMA		3,194		204		0			3,398
		5,625		348		0			5,973
Other marketable securities:
U.S. Government agency obligations		84,042		3		(643	)		83,402
Common stock		58		9		0			67
Corporate preferred stock		700		0		(455	)		245
		84,800		12		(1,098	)		83,714
	$	90,425		360		(1,098	)		89,687

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
December 31, 2012:
Mortgage-backed securities:
FHLMC	$	5,669		294		0			5,963
FNMA		4,076		301		0			4,377
Collateralized mortgage obligations:
FNMA		80		1		0			81
		9,825		596		0			10,421
Other marketable securities:
U.S. Government agency obligations		75,059		170		(4	)		75,225
Corporate preferred stock		700		0		(455	)		245
		75,759		170		(459	)		75,470
	$	85,584		766		(459	)		85,891

The following table indicates amortized cost and estimated fair value of securities available for sale at September 30, 2013 based upon contractual maturity adjusted for scheduled repayments of principal and projected prepayments of principal based upon current economic conditions and interest rates.

(Dollars in thousands)	Amortized Cost		Fair Value
Due less than one year	$	56,147		55,792
Due after one year through five years		33,520		33,583
Due after five years through ten years		0		0
Due after ten years		758		312
Total	$	90,425		89,687

The allocation of mortgage-backed securities in the table above is based upon the anticipated future cash flow of the securities using estimated mortgage prepayment speeds. The allocation of other marketable securities that have call features is based on the anticipated cash flows to the call date that it is anticipated that the security will be called, or to the maturity date if it is not anticipated to be called.