Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2013

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

NOTE 3 - Investment Securities

The amortized costs and fair value of investment securities are as follows:

		September 30, 2013
		Amortized		Gross Unrealized				Fair
(dollars in thousands)		Cost	Gains		Losses		Value
Available for sale
US Government agencies	$	8,755		-		750		8,005
SBA securities		5,904		-		451		5,453
State and political subdivisions		23,868		396		501		23,763
Mortgage-backed securities		32,839		384		274		32,949
Total investment securities available for sale	$	71,366		780		1,976		70,170
		December 31, 2012
		Amortized		Gross Unrealized				Fair
		Cost		Gains		Losses		Value
Available for sale
US Government agencies	$	7,781		14		10		7,785
SBA securities		6,060		17		5		6,072
State and political subdivisions		24,167			48		25,249
Mortgage-backed securities		38,428		702		14		39,116
Total investment securities available for sale	$	76,436		1,863		77		78,222

Contractual maturities and yields on our investment securities at September 30, 2013 and December 31, 2012 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 8,762 

														September 30, 2013
		Less than one year			One to five years			Five to ten years						Over ten years					Total
(dollars in thousands)		Amount	Yield		Amount	Yield		Amount		Yield				Amount		Yield			Amount		Yield
Available for sale
US Government agencies	$	-	-		-	-		971		2.13		%		7,034		2.43		%	8,005		2.40	%
SBA securities		-	-		-	-		-		-				5,453		1.87		%	5,453		1.87	%
State and political subdivisions		777	1.02	%	3,071	0.63	%	5,566		3.18		%		14,349		2.94		%	23,763		2.63	%
Mortgage-backed securities		-	-		-	-		2,225		1.78		%		30,724		2.28		%	32,949		2.24	%
Total	$	777	1.02	%	3,071	0.63	%		2.70	%	57,560				2.42	%	70,170			2.36	%
													December 31, 2012
		Less than one year			One to five years			Five to ten years						Over ten years					Total
		Amount	Yield		Amount	Yield		Amount		Yield				Amount		Yield			Amount		Yield
Available for sale
US Government agencies	$	-	-		-	-		-		-				7,785		2.42		%	7,785		2.42	%
SBA securities		-	-		-	-		-		-				6,072		1.89		%	6,072		1.89	%
State and political subdivisions		421	1.43	%	3,671	0.60	%	5,031		3.11		%		16,126		2.96		%	25,249		2.60	%
Mortgage-backed securities		-	-		-	-		-		-				39,116		2.29		%	39,116		2.29	%
Total	$	421	1.43	%	3,671	0.60	%	5,031		3.11		%		69,099		2.42		%	78,222		2.37	%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at September 30, 2013 and December 31, 2012, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

											September 30, 2013
	Less than 12 months					12 months or longer					Total
(dollars in thousands)	#		Fair value		Unrealized losses	#		Fair value		Unrealized losses	#		Fair value		Unrealized losses
Available for sale
US Government agencies	3	$	8,005	$	750	-	$	-	$	-	3	$	8,005	$	750
SBA securities	2		5,453		451	-		-		-	2		5,453		451
State and political subdivisions	27		11,112		501	-		-		-	27		11,112		501
Mortgage-backed securities	7		13,478		274	-		-		-	7		13,478		274
Total	39	$	38,048	$	1,976	-	$	-	$	-	39	$	38,048	$	1,976
													December 31, 2012
	Less than 12 months					12 months or longer					Total
	#		Fair value		Unrealized losses	#		Fair value		Unrealized losses	#		Fair value		Unrealized losses
Available for sale
US Government agencies	1	$	3,771	$	10	-	$	-	$	-	1	$	3,771	$	10
SBA securities	1		2,015		5	-		-		-	1		2,015		5
State and political subdivisions	16		6,608		48	-		-		-	16		6,608		48
Mortgage-backed securities	2		3,669		14	-		-		-	2		3,669		14
Total	20	$	16,063	$	77	-	$	-	$	-	20	$	16,063	$	77

At September 30, 2013, the Company had 39 individual investments that were in an unrealized loss position for less than 12 months. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The Company considers the length of time and extent to which the fair value of available-for-sale debt securities have been less than cost to conclude that such securities are not other-than-temporarily impaired. We also consider other factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. As the Company has no intent to sell securities with unrealized losses and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of amortized cost, we have concluded that the securities are not impaired on an other-than-temporary basis.

Other investments are comprised of the following and are recorded at cost which approximates fair value.

 

(dollars in thousands)		September 30, 2013	December 31, 2012
Federal Reserve Bank stock	$	-	1,485
Federal Home Loan Bank stock		6,964	5,807
Certificates of deposit with other banks		99	99
Investment in Trust Preferred securities		403	403
Total other investments	$	7,466	7,794