NOTE 2 - SECURITIES

The amortized cost and fair value of available for sale securities and the related gains and losses recognized in accumulated other comprehensive income (loss) was as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
Available-for-Sale		Cost		Gains		Losses		Value
2013
U.S. Government, federal agencies and Government sponsored enterprises	$	122,905	$	142	$	(2,908)	$	120,139
U.S. Government mortgage-backed		219,986		2,408		(2,335)		220,059
Corporate		925		-		-		925
	$	343,816	$	2,550	$	(5,243)	$	341,123

2012
U.S. Government, federal agencies and Government sponsored enterprises	$	127,416	$	1,130	$	(69)	$	128,477
U.S. Government mortgage-backed		180,019		4,972		(84)		184,907
Corporate		1,060		-		-		1,060
	$	308,495	$	6,102	$	(153)	$	314,444

All mortgage-backed securities are secured by residential properties.

The amortized cost, unrecognized gains and losses, and fair value of securities held to maturity were as follows:

				Gross		Gross
		Amortized		Unrecognized		Unrecognized		Fair
Held-to-Maturity		Cost		Gains		Losses		Value
2013
Municipal and other obligations	$	77,010	$	1,085	$	(1,638)	$	76,457

2012
Municipal and other obligations	$	66,843	$	1,900	$	(239)	$	68,504

The fair value of debt securities and amortized cost, if different, at year-end 2013 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage backed securities, are shown separately.

	Available-for-Sale				Held-to-Maturity
		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value
Due in one year or less	$	5,201	$	5,236	$	3,828	$	3,848
Due after one year through five years		36,139		35,445		32,506		33,147
Due after five years through ten years		77,489		75,324		35,461		34,247
Due after ten years		5,001		5,059		5,215		5,215
U.S. Government mortgage-backed		219,986		220,059		-		-
	$	343,816	$	341,123	$	77,010	$	76,457

At December 31, 2013 and 2012, securities with a carrying value of $402,999 and $368,504 were pledged to secure public deposits and repurchase agreements.

The proceeds from sales and calls of securities and the associated gains are listed below:

		2013		2012		2011

Proceeds	$	5,230	$	6,944	$	13,598
Gross gains		274		206		231
Gross losses		-		-		-

The tax provision related to these net realized gains and losses was $96, $72, and $81, respectively.

Securities with unrealized losses at year-end 2013 and 2012, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

		Less than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
2013		Value		Loss		Value		Loss		Value		Loss
Description of Securities
U.S. Gov’t., federal
agencies and Government
sponsored enterprises	$	94,641	$	(2,522)	$	5,996	$	(386)	$	100,637	$	(2,908)
U.S Gov’t. mortgage-backed		116,709		(2,241)		7,530		(94)		124,239		(2,335)
Municipal & other obligations		26,936		(1,262)		6,570		(376)		33,506		(1,638)

Total temporarily impaired	$	238,286	$	(6,025)	$	20,096	$	(856)	$	258,382	$	(6,881)

		Less than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
2012		Value		Loss		Value		Loss		Value		Loss
Description of Securities
U.S. Gov’t., federal
agencies and Government
sponsored enterprises	$	11,877	$	(69)	$	-	$	-	$	11,877	$	(69)
U.S Gov’t. mortgage-backed		18,142		(84)		-		-		18,142		(84)
Municipal & other obligations		15,056		(239)		-		-		15,056		(239)

Total temporarily impaired	$	45,075	$	(392)	$	-	$	-	$	45,075	$	(392)

As of December 31, 2013, the Bank’s security portfolio consisted of 250 securities, 91 of which were in an unrealized loss position; totaling $6,881. There was no other-than-temporary-impairment of securities as of or for the year ended December 31, 2013. Unrealized losses have not been recognized into income because the issuers’ bonds are of high credit quality (U.S. government agencies and government sponsored enterprises and “A” rated or better Kentucky municipalities), management does not have the intent to sell these securities and it is not likely that it will be required to sell the securities before their anticipated recovery.