SECURITIES (Tables)

6 Months Ended

Jun. 30, 2014

Amortized cost and estimated fair value of securities available for sale

Amortized cost and estimated fair value of securities available for sale are as follows (dollars in thousands):

	June 30, 2014
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	166,253	$	1,789	$	96	$	167,946
Mortgage-backed securities, residential		66,933		1,007		16		67,924
Collateralized mortgage obligations		606		8		-		614
Obligations of states and political subdivisions		34,958		1,016		27		35,947
Corporate bonds and notes		2,610		50		5		2,655
SBA loan pools		1,383		16		1		1,398
Trust Preferred securities		1,902		132		-		2,034
Corporate stocks		443		7,439		2		7,880
Total	$	275,088	$	11,457	$	147	$	286,398

	December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	187,098	$	1,915	$	907	$	188,106
Mortgage-backed securities, residential		104,069		1,036		749		104,356
Collateralized mortgage obligations		1,001		14		-		1,015
Obligations of states and political subdivisions		37,339		1,059		22		38,376
Corporate bonds and notes		2,879		76		9		2,946
SBA loan pools		1,471		17		-		1,488
Trust preferred securities		1,898		136		-		2,034
Corporate stocks		444		7,253		2		7,695
Total	$	336,199	$	11,506	$	1,689	$	346,016

Amortized cost and estimated fair value of securities held to maturity

Amortized cost and estimated fair value of securities held to maturity are as follows (dollars in thousands):

	June 30, 2014
	Amortized Cost			Unrealized Gains			Unrealized Losses			Estimated Fair Value
Obligations of states and political subdivisions		$	4,503		$	355		$	-		$	4,858
Time deposits with other financial institutions			771			3			-			774
Total		$	5,274		$	358		$	-		$	5,632

	December 31, 2013
	Amortized Cost			Unrealized Gains			Unrealized Losses			Estimated Fair Value
Obligations of states and political subdivisions		$	5,472		$	419		$	-		$	5,891
Time deposits with other financial institutions			1,023			16			-			1,039
Total		$	6,495		$	435		$	-		$	6,930

Amortized cost and estimated fair value of debt securities by contractual maturity

The amortized cost and estimated fair value of debt securities are shown below by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately (dollars in thousands):

	June 30, 2014
	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Within One Year	$	27,621	$	27,954	$	1,903	$	1,921
After One, But Within Five Years		171,537		173,982		2,219		2,390
After Five, But Within Ten Years		6,565		6,646		1,152		1,321
After Ten Years		-		-		-		-
		205,723		208,582		5,274		5,632
Mortgage-backed securities, residential		66,933		67,924
Collateralized mortgage obligations		606		614
SBA loan pools		1,383		1,398
Total	$	274,645	$	278,518	$	5,274	$	5,632

Proceeds from sales and calls of securities resulting in gains or losses

The proceeds from sales and calls of securities resulting in gains or losses at June 30, 2014 and June 30, 2013 are listed below (dollars in thousands):

	2014		2013
Proceeds	$	49,765	$	10,534
Gross gains	$	522	$	1
Gross losses	$	-	$	-
Tax expense	$	201	$	-

Investment securities available for sale in an unrealized loss position

The following tables summarize the investment securities available for sale with unrealized losses at June 30, 2014 and December 31, 2013 by aggregated major security type and length of time in a continuous unrealized loss position (dollars in thousands):

	Less than 12 months				12 months or longer				Total
June 30, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	19,800	$	21	$	15,728	$	75	$	35,528	$	96
Mortgage-backed securities, residential		5,587		16				-		5,587		16
Obligations of states and political subdivisions		4,440		24		737		3		5,177		27
Corporate bonds and notes		-		-		242		5		242		5
SBA loan pools		620		1		-		-		620		1
Corporate stocks		-		-		2		2		2		2
Total temporarily impaired securities	$	30,447	$	62	$	16,709	$	85	$	47,156	$	147

	Less than 12 months				12 months or longer				Total
December 31, 2013	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	83,840	$	867	$	1,978	$	39	$	85,818	$	906
Mortgage-backed securities, residential		63,115		750		-		-		63,115		750
Obligations of states and political subdivisions		4,589		22		-		-		4,589		22
Corporate bonds and notes		238		9		-		-		238		9
Corporate stocks		-		-		2		2		2		2
Total temporarily impaired securities	$	151,782	$	1,648	$	1,980	$	41	$	153,762	$	1,689

Roll forward of the cumulative credit losses recognized in earnings

The tables below present a roll forward of the cumulative credit losses recognized in earnings for the three and six-month periods ending June 30, 2014 and 2013 (dollars in thousands):

	2014			2013
Beginning balance, January 1,	$	1,939		$	3,506
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized		-			-
Additions/Subtractions:
Amounts realized for securities sold during the period		-			-
Amounts related to securities for which the company intends to sell or that it will be more likely than not that the company will be required to sell prior to recovery of amortized cost basis		-			-
Reductions for increase in cash flows expected to be collected that are recognized over the remaining life of the security		-			-
Reductions for previous credit losses realized in securities liquidated during the period		(1,939	)		-
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized		-			-
Ending balance, June 30,	$	-		$	3,506

	2014		2013
Beginning balance, April 1,	$	-	$	3,506
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized		-		-
Additions/Subtractions:
Amounts realized for securities sold during the period		-		-
Amounts related to securities for which the company intends to sell or that it will be more likely than not that the company will be required to sell prior to recovery of amortized cost basis		-		-
Reductions for increase in cash flows expected to be collected that are recognized over the remaining life of the security		-		-
Reductions for previous credit losses realized in securities liquidated during the period		-		-
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized		-		-
Ending balance, June 30,	$	-	$	3,506

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- Definition

Tabular disclosure of the realized and unrealized gains and losses reported in the statement of income which have resulted from the sale and holding of marketable securities, respectively, as well as the sale or disposal of cost method investments. Such amounts would include realized gains and losses on the sale or disposal of trading, available-for-sale, and held-to-maturity securities, unrealized gains and losses on trading securities, unrealized gains and losses on available-for-sale and held-to-maturity securities transferred to the trading securities category, realized gains and losses on the sale or disposal of cost method investments, and losses recognized for other than temporary impairments (OTTI) of such investments.

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- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

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- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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