Investment Securities

3 Months Ended

Mar. 31, 2014

Investment Securities [Abstract]

Investment Securities

NOTE 3 – Investment Securities

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

	March 31, 2014
	Amortized	Gross Unrealized		Fair
(dollars in thousands)	Cost	Gains	Losses	Value
Available for sale
US government agencies	$  8,758	2	714	8,046
SBA securities	5,757	-	429	5,328
State and political subdivisions	23,589	510	283	23,816
Mortgage-backed securities	31,520	358	321	31,557
Total investment securities available for sale	$69,624	870	1,747	68,747
	December 31, 2013
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Available for sale
US government agencies	$  8,756	-	1,001	7,755
SBA securities	5,758	-	487	5,271
State and political subdivisions	23,622	331	583	23,370
Mortgage-backed securities	31,347	246	549	31,044
Total investment securities available for sale	$69,483	577	2,620	67,440

Contractual maturities and yields on our investment securities at March 31, 2014 and December 31, 2013 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.  

								March 31, 2014
	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	$	-	-	-	-	977	2.13%	7,069	2.43%	8,046	2.40%
SBA securities	-		-	-	-	-	-	5,328	1.87%	5,328	1.87%
State and political subdivisions	1,502		0.51%	2,108	0.68%	9,556	3.22%	10,650	2.82%	23,816	2.64%
Mortgage-backed securities	-		-	-	-	2,514	1.88%	29,043	2.84%	31,557	2.77%
Total	$	1,502	0.51%	2,108	0.68%	13,047	2.87%	52,090	2.67%	68,747	2.60%
								December 31, 2013
	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	$	-	-	-	-	956	2.13%	6,799	2.43%	7,755	2.40%
SBA securities	-		-	-	-	-	-	5,271	1.88%	5,271	1.88%
State and political subdivisions	1,507		0.51%	2,114	0.67%	7,398	3.22%	12,351	2.88%	23,370	2.63%
Mortgage-backed securities	-		-	-	-	2,072	1.77%	28,972	2.69%	31,044	2.62%
Total	$	1,507	0.51%	2,114	0.67%	10,426	2.82%	53,393	2.61%	67,440	2.54%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at March 31, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

							March 31, 2014
	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	1	$  3,618	$  382	1	$3,451	$ 332	2	$   7,069	$  714
SBA securities	-	-	-	2	5,328	429	2	5,328	429
State and political subdivisions	10	4,214	143	7	3,173	140	17	7,387	283
Mortgage-backed securities	7	10,914	299	1	1,480	22	8	12,394	321
Total	18	$18,746	$824	11	$ 13,432	$  923	29	$32,178	$1,747
								December 31, 2013
	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	3	$  7,755	$  1,001	-	$     -	$     -	3	$  7,755	$  1,001
SBA securities	-	-	-	2	5,271	487	2	5,271	487
State and political subdivisions	22	8,482	364	9	3,705	219	31	12,187	583
Mortgage-backed securities	10	16,146	549	-	-	-	10	16,146	549
Total	35	$32,383	$  1,914	11	$ 8,976	$    706	46	$41,359	$  2,620

At March 31, 2014, the Company had 18 individual investments with a fair market value of $18.7 million that were in an unrealized loss position for less than 12 months and 11 individual investments with a fair market value of $13.4 million that were in an unrealized loss position for 12 months or longer.  The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality.  The individual securities are each investment grade securities.  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)	March 31, 2014	December 31, 2013
Federal Home Loan Bank stock	$  5,458	5,614
Certificates of deposit with other banks	99	99
Investment in Trust Preferred securities	403	403
Total other investments	$5,960	6,116

The Company has evaluated the Federal Home Loan Bank (“FHLB”) stock for impairment and determined that the investment in the FHLB stock is not other than temporarily impaired as of March 31, 2014 and ultimate recoverability of the par value of this investment is probable.  All of the FHLB stock is used to collateralize advances with the FHLB.

At March 31, 2014 $21.9 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $29.9 million of securities were pledged to secure client deposits.  At December 31, 2013, $22.0 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $25.0 million of securities were pledged to secure client deposits.