Investment Securities

12 Months Ended

Dec. 31, 2012

Investment Securities [Abstract]

INVESTMENT SECURITIES

NOTE B – INVESTMENT SECURITIES

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of investment securities at December 31, 2012 and 2011 are as follows:

	2012
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
			(In thousands)
Available for sale:
U.S. Government sponsored enterprises	$	83,956	$	118	$	3	$	84,071
Corporate equity securities		44		0		0		44
Mortgage-backed securities		1,146		37		0		1,183
Total investment securities available for sale	$	85,146	$	155	$	3	$	85,298
Held to maturity:
Mortgage-backed securities	$	903	$	54	$	0	$	957
Total investment securities held to maturity	$	903	$	54	$	0	$	957

	2011
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
			(In thousands)
Available for sale:
U.S. Government sponsored enterprises	$	16,289	$	6	$	3	$	16,292
Corporate equity securities		106		0		54		52
Mortgage-backed securities		1,469		32		0		1,501
Total investment securities available for sale	$	17,864	$	38	$	57	$	17,845
Held to maturity:
Municipal bonds	$	2,008	$	0	$	0	$	2,008
Mortgage-backed securities		1,075		52		0		1,127
Total investment securities held to maturity	$	3,083	$	52	$	0	$	3,135

The amortized cost and estimated fair value of investment securities at December 31, 2012 by contractual term to maturity are shown below.

	Available for Sale				Held to Maturity
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
	(In thousands)
Due in one year or less	$	6,499	$	6,500	$	0	$	0
Due after one year through five years		77,457		77,571		0		0
Due after five years through ten years		0		0		0		0
Due after ten years		0		0		0		0
Subtotal		83,956		84,071		0		0
Mortgage-backed securities		1,146		1,183		903		957
Corporate equity securities		44		44		0		0
Total	$	85,146	$	85,298	$	903	$	957

Proceeds from the sale of investment securities during the years ended December 31, 2012, 2011 and 2010, totaled $4.3 million, $27.2 million, and $0 million respectively, resulting in gross realized gains of $126,000, $1.3 million, and $0 in those respective years.

At December 31, 2012 and 2011, there were $3.0 million and $7.0 million securities in an unrealized loss position less than twelve months and $0 and $52,000 of securities in an unrealized loss position more than twelve months, respectively. The table below indicates the length of time individual securities have been in a continuous unrealized loss position at December 31, 2012 and 2011.

	2012
	Less than 12 months						More than 12 months
(In thousands)	Fair value		Unrealized losses		No. of Securities		Fair value		Unrealized losses		No. of Securities
Available for sale:
U.S. Government sponsored enterprises		2,995		3		1		0		0		0
Total	$	2,995	$	3		1	$	0	$	0		0

	2011
	Less than 12 months						More than 12 months
(In thousands)	Fair value		Unrealized losses		No. of Securities		Fair value		Unrealized losses		No. of Securities
Available for sale:
Corporate equity securities	$	0	$	0		0	$	52	$	54		2
U.S. Government sponsored enterprises		6,994		3		3		0		0		0
Total	$	6,994	$	3		3	$	52	$	54		2

As of December 31, 2012, management has the intent and ability to hold these securities for the foreseeable future and the decline in the fair value is primarily due to an increase in market interest rates. The fair values are expected to recover as securities approach maturity dates.

In 2011, corporate equity securities at a cost of $100,000 were in a loss position for more than 12 months. During 2012, the securities were evaluated and management considered $56,000 of the investment to be other than temporarily impaired in 2012. The OTTI was deemed to be credit-related and the impairment charge of $56,000 was recorded through current year earnings.

At December 31, 2012 and 2011, approximately $10.0 million and $13.7 million, respectively, of investment securities were pledged in accordance with federal and state requirements to secure deposits and repurchase agreements.