Securities

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Securities

Note 4 – Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
September 30, 2013: (Unaudited)
U.S. Government sponsored agencies	$	23,544	$	33	$	(359	)	$	23,218
Mortgage-backed securities – government sponsored entities		10,872		122		(185	)		10,809
State and political subdivisions		16,351		160		(201	)		16,310
	$	50,767	$	315	$	(745	)	$	50,337
Available-for-sale Securities:
December 31, 2012
U.S. Government sponsored agencies	$	10,639	$	83	$	(13	)	$	10,709
Mortgage-backed securities – government sponsored entities		6,989		209		---			7,198
State and political subdivisions		9,840		271		(14	)		10,097
	$	27,468	$	563	$	(27	)	$	28,004

The amortized cost and fair value of available-for-sale securities at September 30, 2013, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale
	Amortized Cost		Fair Value
	(Unaudited; In thousands)
Within one year	$	1,246	$	1,247
One to five years		25,672		25,531
Five to ten years		12,977		12,750
After ten years		---		---
		39,895		39,528
Mortgage-backed securities		10,872		10,809
Totals	$	50,767	$	50,337

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $1.8 million at September 30, 2013 and $2.0 million at December 31, 2012.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at September 30, 2013 and December 31, 2012 was $32.4 million and $5.6 million, which is approximately 64% and 20%, respectively, of the Company’s available-for-sale investment portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary.

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.

The following table shows our investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position at September 30, 2013 and December 31, 2012.

	Less Than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
September 30, 2013 (Unaudited)
U.S. Government sponsored agencies	$	15,185	$	359	$	---	$	---	$	15,185	$	359
Mortgage-backed securities – government sponsored entities		8,063		184		7		1		8,070		185
State and political subdivisions		9,124		201		---		---		9,124		201
Total temporarily impaired securities	$	32,372	$	744	$	7	$	1	$	32,379	$	745
December 31, 2012
U.S. Government sponsored agencies	$	3,076	$	13	$	---	$	---	$	3,076	$	13
State and political subdivisions		2,541		14		---		---		2,541		14
Total temporarily impaired securities	$	5,617	$	27	$	---	$	---	$	5,617	$	27