Note 2 - Investment Securities

3 Months Ended

Mar. 31, 2013

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

Note 2. Investment Securities

The following tables present information regarding securities available for sale:

March 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury securities	$	6,388	$	2	$	-	$	6,390
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal Home Loan Mortgage Corporation)		15,858		104		11		15,951
CMOs (Government National Mortgage Association)		2,427		11		10		2,428
Federal National Mortgage Association		1,850		112		-		1,962
Federal Home Loan Mortgage Corporation		19		-		1		18
Government National Mortgage Association		80		2		-		82
Total residential mortgage-backed securities		20,234		229		22		20,441
Agency notes
Federal National Mortgage Association		950		1		-		951
Federal Home Loan Bank		500		-		-		500
Federal Home Loan Mortgage Corporation		75		3		-		78
Federal Farm Credit Bank		200		1		-		201
Total obligations of U.S. government corporations and government sponsored enterprises		21,959		234		22		22,171
Obligations of state and political institutions-New York Bank Qualified		16,500		1,203		-		17,703
Single-issuer, trust preferred securities		36,161		1,346		26		37,481
Other preferred securities		9,429		52		94		9,387
Corporate debt securities		162,115		1,169		181		163,103
Equity and other securities		18,721		3,203		212		21,712
Total	$	271,273	$	7,209	$	535	$	277,947

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury securities	$	6,387	$	1	$	2	$	6,386
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal Home Loan Mortgage Corporation)		19,615		47		30		19,632
CMOs (Government National Mortgage Association)		3,293		12		14		3,291
Federal National Mortgage Association		1,860		118		-		1,978
Federal Home Loan Mortgage Corporation		20		-		1		19
Government National Mortgage Association		85		1		-		86
Total residential mortgage-backed securities		24,873		178		45		25,006
Agency notes
Federal National Mortgage Association		650		1		-		651
Federal Home Loan Bank		500		1		-		501
Federal Home Loan Mortgage Corporation		75		4		-		79
Total obligations of U.S. government corporations and government sponsored enterprises		26,098		184		45		26,237
Obligations of state and political institutions-New York Bank Qualified		16,499		1,424		-		17,923
Single-issuer, trust preferred securities		37,875		1,090		80		38,885
Other preferred securities		12,012		3		62		11,953
Corporate debt securities		173,332		1,288		202		174,418
Equity and other securities		19,371		2,129		465		21,035
Total	$	291,574	$	6,119	$	856	$	296,837

 The following tables present information regarding securities held to maturity:

March 31, 2013	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal National Mortgage Association)	$	1,734	$	90	$	-	$	1,824
CMOs (Federal Home Loan Mortgage Corporation)		2,992		133		-		3,125
Federal National Mortgage Association		29,436		2,575		-		32,011
Federal Home Loan Mortgage Corporation		14,087		1,107		-		15,194
Government National Mortgage Association		3,219		560		-		3,779
Total residential mortgage-backed securities		51,468		4,465		-		55,933
Agency notes
Federal National Mortgage Association		125,977		46		108		125,915
Federal Home Loan Bank		75,689		12		59		75,642
Total obligations of U.S. government corporations and government sponsored enterprises		253,134		4,523		167		257,490
Obligations of state and political institutions-New York Bank Qualified		133,980		9,549		3		143,526
Total	$	387,114	$	14,072	$	170	$	401,016

December 31, 2012	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal National Mortgage Association)	$	2,051	$	88	$	-	$	2,139
CMOs (Federal Home Loan Mortgage Corporation)		3,525		145		-		3,670
Federal National Mortgage Association		32,731		2,854		-		35,585
Federal Home Loan Mortgage Corporation		15,768		1,237		-		17,005
Government National Mortgage Association		3,385		559		-		3,944
Total residential mortgage-backed securities		57,460		4,883		-		62,343
Agency notes
Federal National Mortgage Association		95,977		95		74		95,998
Federal Home Loan Bank		81,989		38		12		82,015
Federal Home Loan Mortgage Corporation		15,000		21		-		15,021
Total obligations of U.S. government corporations and government sponsored enterprises		250,426		5,037		86		255,377
Obligations of state and political institutions-New York Bank Qualified		135,982		11,861		2		147,841
Total	$	386,408	$	16,898	$	88	$	403,218

The following tables present information regarding securities available for sale with temporary unrealized losses for the periods indicated:

	Less Than 12 Months				12 Months or Longer				Total
March 31, 2013	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal Home Loan Mortgage Corporation)	$	5,049	$	3	$	1,946	$	8	$	6,995	$	11
CMOs (Government National Mortgage Association)		-		-		793		10		793		10
Federal Home Loan Mortgage Corporation		-		-		18		1		18		1
Total obligations of U.S. government corporations and government sponsored enterprises		5,049		3		2,757		19		7,806		22
Single-issuer, trust preferred securities		4,950		23		495		3		5,445		26
Other preferred securities		6,293		94		-		-		6,293		94
Corporate debt securities		37,682		20		13,274		161		50,956		181
Equity and other securities		1,371		96		568		116		1,939		212
Total	$	55,345	$	236	$	17,094	$	299	$	72,439	$	535

December 31, 2012
U.S. Treasury securities	$	388	$	2	$	-	$	-	$	388	$	2
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal Home Loan Mortgage Corporation)		5,876		12		2,314		18		8,190		30
CMOs (Government National Mortgage Association)		-		-		1,518		14		1,518		14
Federal Home Loan Mortgage Corporation		-		-		19		1		19		1
Total obligations of U.S. government corporations and government sponsored enterprises		5,876		12		3,851		33		9,727		45
Single-issuer, trust preferred securities		9,698		71		1,079		9		10,777		80
Other preferred securities		11,849		62		-		-		11,849		62
Corporate debt securities		35,832		73		10,667		129		46,499		202
Equity and other securities		2,476		316		1,057		149		3,533		465
Total	$	66,119	$	536	$	16,654	$	320	$	82,773	$	856

The following tables present information regarding securities held to maturity with temporary unrealized losses for the periods indicated:

	Less Than 12 Months				12 Months or Longer				Total
March 31, 2013	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government corporations and government sponsored enterprises
Agency notes
Federal National Mortgage Association	$	75,888	$	108	$	-	$	-	$	75,888	$	108
Federal Home Loan Bank		56,641		59		-		-		56,641		59
Total obligations of U.S. government corporations and government sponsored enterprises		132,529		167		-		-		132,529		167
Obligations of state and political institutions-New York Bank Qualified		202		3		-		-		202		3
Total	$	132,731	$	170	$	-	$	-	$	132,731	$	170

December 31, 2012
Obligations of U.S. government corporations and government sponsored enterprises
Agency notes
Federal National Mortgage Association	$	14,926	$	74	$	-	$	-	$	14,926	$	74
Federal Home Loan Bank		32,987		12		-		-		32,987		12
Total obligations of U.S. government corporations and government sponsored enterprises		47,913		86		-		-		47,913		86
Obligations of state and political institutions-New York Bank Qualified		203		2		-		-		203		2
Total	$	48,116	$	88	$	-	$	-	$	48,116	$	88

The following table presents information regarding single-issuer, trust preferred securities at March 31, 2013:

Issuer	TARP Recipient	Credit Rating	Amortized Cost		Fair Value		Unrealized Gain/(Loss)
Sterling Bancorp Trust I, 8.375%, due 3/31/2032	Yes *	NA	$	991	$	1,102	$	111
ABN Ambro NA Holding Cap, Floating Rate, due 4/03/2013, owned by Bank of America	Yes *	BB+		500		500		-
Allfirst Pfd Cap Trust, Floating Rate,  due 7/15/2029,  owned by M&T Bank Corporation	Yes *	BBB		383		415		32
Citigroup Capital VII, 7.125%, due 7/31/2031, called 4/16/13	Yes *	BB		2,114		2,129		15
Citigroup Capital VIII, 6.95%, due 9/15/2031, called 4/16/13	Yes *	BB		1,683		1,694		11
Citigroup Capital IX, 6.00%, due 2/14/2033	Yes *	BB		3,310		3,486		176
Citigroup Capital X, 6.10%, due 9/30/2033	Yes *	BB		1,256		1,278		22
Citigroup Capital XI, 6.00%, due 9/27/2034	Yes *	BB		1,153		1,165		12
Citigroup Capital XV, 6.50%,  due 9/15/2066, called 4/16/13	Yes *	BB		234		234		-
Citigroup Capital XVII, 6.35%, due 3/15/2067	Yes *	BB		46		63		17
Countrywide Capital IV, 6.75%,  due 4/01/2033, owned by Bank of America	Yes *	BB+		149		150		1
Countrywide Capital V, 7.00%, due 11/01/2036, owned by Bank of America	Yes *	BB+		2,507		2,555		48
First Tennessee Capital II, 6.30%, due 4/15/2034	Yes *	BB		5,120		5,291		171
Goldman Sachs Capital, Floating Rate, due 6/01/2043	Yes *	BB+		850		841		(9	)
Goldman Sachs Capital I, 6.345%, due 2/15/2034	Yes *	BB+		8,912		9,377		465
Keycorp Capital II, 6.875%, due 3/17/2029	Yes *	BBB-		93		100		7
Mellon Capital IV, Floating Rate, due 6/29/2049	Yes *	BBB		118		120		2
JP Morgan Chase Capital XIII, Floating Rate, due 9/30/2034	Yes *	BBB		762		830		68
JP Morgan Chase Capital XI, 5.875%, due 6/15/2033, called 5/8/13	Yes *	BBB		1,623		1,632		9
Morgan Stanley Capital Trust V, 5.75%, due 7/15/2033	Yes *	BB+		2,005		2,000		(5	)
Morgan Stanley Capital Trust III, 6.25%, due 3/01/2033	Yes *	BB+		1,045		1,125		80
PNC Financial Services, Fixed to Floating Rate, due 4/19/2013	Yes *	BBB		460		465		5
SunTrust Capital I, Floating Rate, due 5/15/2027	Yes *	BB+		736		815		79
USB Capital IX, Floating Rate, due 10/29/2049	Yes *	BBB+		90		93		3
VNB Capital Trust I, 7.75%,  due 12/15/2031	Yes *	BBB-		21		21		-
			$	36,161	$	37,481	$	1,320

*  TARP obligation was repaid prior to March 31, 2013.

The Company invests principally in obligations of U.S. government corporations and government sponsored enterprises and other investment-grade securities.  The fair value of these investments fluctuates based on several factors, including credit quality and general interest rate changes.  The Company determined that it is not more likely than not that the Company would be required to sell any investments before anticipated recovery.

At March 31, 2013, approximately $131.3 million representing approximately 19.7% of the Company’s held to maturity and available for sale securities is comprised of securities issued by financial service companies/banks including single-issuer trust preferred securities (25 issuers), corporate debt (39 issuers), other preferred securities (1 issuer) and equity and other securities (14 issuers).  These investments may pose a higher risk of future impairment charges as a result of a lack of significant improvement of the U.S. economy and/or a further deterioration in stock prices of the companies in the financial services industry.  The Company would be required to recognize impairment charges on these securities if they suffer a decline in value that is considered other-than-temporary.  Numerous factors, including lack of liquidity for re-sales of certain investment securities, absence of reliable pricing information for investment securities, adverse changes in business climate, adverse actions by regulators or unanticipated changes in the competitive environment could have a negative effect on the Company’s investment portfolio and may result in other-than-temporary impairment on certain investment securities in future periods.

At March 31, 2013, the Company held 1 security position of single-issuer, trust preferred securities issued by a financial institution, in the available for sale portfolio, that was in an unrealized loss position for more than 12 months and is paying in accordance with its term and has no deferrals of interest or other deferrals.  In addition, management analyzes the performance of the issuer on a periodic basis, including a review of the issuer’s most recent bank regulatory reports and other public regulatory disclosures, to assess credit risk and the probability of impairment of the contractual cash flows of the applicable security.  Based upon management’s first quarter review, the issuer has maintained performance levels adequate to support the contractual cash flows of the security.

At March 31, 2013, the Company held 8 security positions of corporate debt securities issued by financial institutions and other corporate issuers in the available for sale portfolio that were in an unrealized loss position for more than 12 months.  Each of these positions are paying in accordance with their terms and have no deferrals of interest or other deferrals.  In addition, management analyzes the performance of each issuer on a periodic basis, including a review of the issuer’s most recent public regulatory disclosures, to assess credit risk and the probability of impairment of the applicable securities.  Based upon management’s first quarter review, management has concluded that the unrealized losses are deemed to be temporary.

At March 31, 2013, the Company held 3 issues of equity and other securities, in the available for sale portfolio, that were in an unrealized loss position for more than 12 months.  Each of these issues is rated as “hold” or better by the analysts who cover them.  In addition, management analyzes the performance of each issuer on a periodic basis, including a review of the issuer’s most recent public regulatory disclosures, to assess credit risk and the probability of impairment of the applicable securities.  Based upon management’s first quarter review, management has concluded that the unrealized losses are deemed to be temporary.

The following tables present information regarding securities available for sale and securities held to maturity at March 31, 2013, based on contractual maturity. 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
U.S. Treasury securities
Due within 1 year	$	5,998	$	5,999
Due after 5 years but within 10 years		390		391
Total U.S. Treasury securities		6,388		6,390
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal Home Loan Mortgage Corporation)		15,858		15,951
CMOs (Government National Mortgage Association)		2,427		2,428
Federal National Mortgage Association		1,850		1,962
Federal Home Loan Mortgage Corporation		19		18
Government National Mortgage Association		80		82
Total residential mortgage-backed securities		20,234		20,441
Agency notes
Federal National Mortgage Association
Due after 1 year but within 5 years		700		701
Due after 5 years but within 10 years		250		250
Federal Home Loan Bank
Due after 1 year but within 5 years		500		500
Federal Home Loan Mortgage Corporation
Due after 1 year but within 5 years		75		78
Federal Farm Credit Bank
Due after 10 years		200		201
Total obligations of U.S. government corporations and government sponsored enterprises		21,959		22,171
Obligations of state and political institutions - New York Bank Qualified
Due after 5 years but within 10 years		3,355		3,612
Due after 10 years		13,145		14,091
Total obligations of state and political institutions-New York Bank Qualified		16,500		17,703
Single-issuer, trust preferred securities
Due within 1 year		3,237		3,253
Due after 10 years		32,924		34,228
Total single-issuer, trust preferred securities		36,161		37,481
Other preferred securities
Due within 1 year		9,429		9,387
Total other preferred securities		9,429		9,387
Corporate debt securities
Due within 6 months		83,889		83,949
Due after 6 months but within 1 year		31,991		32,264
Due after 1 year but within 2 years		27,629		28,112
Due after 2 years but within 5 years		16,189		16,268
Due after 5 years but within 10 years		2,318		2,402
Due after 10 years		99		108
Total corporate debt securities		162,115		163,103
Equity and other securities		18,721		21,712
Total	$	271,273	$	277,947

Held to maturity	Carrying Value		Fair Value
Obligations of U.S. government corporations and government sponsored enterprises
Residential mortgage-backed securities
CMOs (Federal National Mortgage Association)	$	1,734	$	1,824
CMOs (Federal Home Loan Mortgage Corporation)		2,992		3,125
Federal National Mortgage Association		29,436		32,011
Federal Home Loan Mortgage Corporation		14,087		15,194
Government National Mortgage Association		3,219		3,779
Total residential mortgage-backed securities		51,468		55,933
Agency notes
Federal National Mortgage Association
Due after 1 year but within 5 years		10,000		10,007
Due after 10 years		115,977		115,908
Federal Home Loan Bank
Due after 10 years		75,689		75,642
Total obligations of U.S. government corporations and government sponsored enterprises		253,134		257,490
Obligations of state and political institutions - New York Bank Qualified
Due after 1 year but within 5 years		154		168
Due after 5 years but within 10 years		10,285		11,256
Due after 10 years		123,541		132,102
Total obligations of state and political institutions-New York Bank Qualified		133,980		143,526
Total	$	387,114	$	401,016

Information regarding sales/calls of available for sale securities is as follows:  

	Three Months Ended March 31,
	2013		2012
Sales
Proceeds	$	13,478	$	48,374
Gross gains		172		742
Gross losses		26		1
Calls
Proceeds		11,644		15,758
Gross gains		80		156
Gross losses		7		22

Information regarding sales/calls of held to maturity securities is as follows:  

	Three Months Ended March 31,
	2013		2012
Sales
Proceeds	$	1,910	$	-
Gross gains		-		-
Gross losses		87		-
Calls
Proceeds		45,000		70,000
Gross gains		-		4
Gross losses		-		-

The held to maturity securities sold during the three months ended March 31, 2013  were comprised of a single issue of bonds from a municipality that had experienced a deterioration in its credit standing due to a fall-off of property tax revenues and expenses incurred due to Hurricane Sandy. There were no transfers of held to maturity securities during the three-month periods ended March 31, 2013 or March 31, 2012.