INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2011

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 3 - INVESTMENT SECURITIES

The amortized cost and fair values of investment securities at December 31, 2011 and 2010 are as follows:

	2011
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(In Thousands)	Cost		Gains		Losses			Value
Available for sale (AFS)
U.S. Government and agency securities	$	26,755	$	1,916	$	—		$	28,671
State and political securities	174,790		8,398		(4,887		)	178,301
Other debt securities	51,447		133		(2,066		)	49,514
Total debt securities	252,992		10,447		(6,953		)	256,486
Financial institution securities	9,939		1,095		(232		)	10,802
Other equity securities	2,751		133		(75		)	2,809
Total equity securities	12,690		1,228		(307		)	13,611
Total investment securities AFS	$	265,682	$	11,675	$	(7,260	)	$	270,097
Held to maturity (HTM)
U.S. Government and agency securities	$	—	$	—	$	—		$	—
Other debt securities	54		1		—			55
Total investment securities HTM	$	54	$	1	$	—		$	55

	2010
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(In Thousands)	Cost		Gains		Losses			Value
Available for sale (AFS)
U.S. Government and agency securities	$	24,759	$	1,854	$	—		$	26,613
State and political securities	169,844		282		(15,339		)	154,787
Other debt securities	20,141		503		(36		)	20,608
Total debt securities	214,744		2,639		(15,375		)	202,008
Financial institution securities	11,549		1,686		(44		)	13,191
Other equity securities	296		70		—			366
Total equity securities	11,845		1,756		(44		)	13,557
Total investment securities AFS	$	226,589	$	4,395	$	(15,419	)	$	215,565
Held to maturity (HTM)
U.S. Government and agency securities	$	5	$	—	$	—		$	5
Other debt securities	78		—		—			78
Total investment securities HTM	$	83	$	—	$	—		$	83

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2011 and 2010.

	2011
	Less than Twelve Months					Twelve Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. Government and agency securities	$	—	$	—		$	—	$	—		$	—	$	—
State and political securities	1,142		(6		)	28,260		(4,881		)	29,402		(4,887		)
Other debt securities	35,858		(2,048		)	82		(18		)	35,940		(2,066		)
Total debt securities	37,000		(2,054		)	28,342		(4,899		)	65,342		(6,953		)
Financial institution securities	1,140		(116		)	273		(116		)	1,413		(232		)
Other equity securities	263		(65		)	130		(10		)	393		(75		)
Total equity securities	1,403		(181		)	403		(126		)	1,806		(307		)
Total	$	38,403	$	(2,235	)	$	28,745	$	(5,025	)	$	67,148	$	(7,260	)

	2010
	Less than Twelve Months					Twelve Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. Government and agency securities	$	—	$	—		$	—	$	—		$	—	$	—
State and political securities	105,826		(5,883		)	32,847		(9,456		)	138,673		(15,339		)
Other debt securities	2,501		(19		)	282		(17		)	2,783		(36		)
Total debt securities	108,327		(5,902		)	33,129		(9,473		)	141,456		(15,375		)
Financial institution securities	859		(41		)	59		(3		)	918		(44		)
Other equity securities	—		—			—		—			—		—
Total equity securities	859		(41		)	59		(3		)	918		(44		)
Total	$	109,186	$	(5,943	)	$	33,188	$	(9,476	)	$	142,374	$	(15,419	)

At December 31, 2011 and 2010 there were 50 and 160 individual securities in a continuous unrealized loss position for less than twelve months and 71 and 84 individual securities in a continuous unrealized loss position for greater than twevle months, respectively.

There are 121 and 244 positions that are considered temporarily impaired as of December 31, 2011 and 2010, respectively.  The Company reviews its position quarterly and has asserted that at December 31, 2011 and 2010, the declines outlined in the above table represent temporary declines and the Company does not intend to sell and does not believe they will be required to sell these securities before recovery of their cost basis, which may be at maturity.  The Company has concluded that any impairment of its investment securities portfolio is not other than temporary but is the result of interest rate changes that are not expected to result in the noncollection of principal and interest during the period.

The amortized cost and fair value of debt securities at December 31, 2011, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
	Amortized				Amortized
(In Thousands)	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	10,239	$	10,276	$	54	$	55
Due after one year to five years	29,105		28,017		—		—
Due after five years to ten years	22,175		21,563		—		—
Due after ten years	191,473		196,630		—		—
Total	$	252,992	$	256,486	$	54	$	55

Total gross proceeds from sales of securities available for sale were $13,454,000, $3,700,000, and $14,757,000 for 2011, 2010, and 2009, respectively.  The following table represents gross realized gains and losses on those transactions in addition to impairment charges in 2009 related to the equity and other debt security portfolios:

(In Thousands)	2011		2010		2009
Gross realized gains:
U.S. Government and agency securities	$	4	$	—	$	—
State and political securities	114		—		—
Other debt securities	8		117		575
Financial institutions securities	316		102		22
Other equity securities	294		—		—
Total gross realized gains	$	736	$	219	$	597
Gross realized losses:
U.S. Government and agency securities	$	—	$	—	$	—
State and political securities	100		3		—
Other debt securities	15		15		1,062
Financial institutions securities	—		28		4,381
Other equity securities	—		—		—
Total gross realized losses	$	115	$	46	$	5,443

Gross realized losses for the equity and other debt security portfolios include impairment charges of $4,614,000 for the year ended December 31, 2009.   There were no impairment charges for the years ended December 31, 2010 and 2011.

Investment securities with a carrying value of approximately $113,611,000 and $88,468,000 at December 31, 2011 and 2010, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law.

There is no concentration of investments that exceed ten percent of shareholders’ equity for any individual issuer, excluding those guaranteed by the U.S. Government.