The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities available for sale by major security type as of March 31, 2012 are as follows:

	March 31, 2012
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for sale:
U.S. Treasury	$	2,009	$	119	$	---	$	2,128
U.S. Government agencies		118,568		878		882		118,564
Mortgage-backed securities		6,054		528		---		6,582
States and political subdivisions		46,891		1,940		12		48,819
Corporate		18,216		405		183		18,438
Federal Home Loan Bank stock		1,596		---		---		1,596
Federal Reserve Bank stock		92		---		---		92
Other securities		2,292		7		172		2,127
Total	$	195,718	$	3,877	$	1,249	$	198,346

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities held to maturity by major security type as of March 31, 2012 are as follows:

	March 31, 2012
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to maturity:
U.S. Government agencies	$	14,997	$	488	$	121	$	15,364
Mortgage-backed securities		851		91		---		942
States and political subdivisions		122,865		7,817		151		130,531
Corporate		654		18		---		672
Total	$	139,367	$	8,414	$	272	$	147,509

Information pertaining to securities with gross unrealized losses at March 31, 2012 and December 31, 2011, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	March 31, 2012
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily impaired securities:
U.S. Government agencies and corporations	$	72,910	$	1,003	$	---	$	---
States and political subdivisions		9,777		162		256		1
Corporate debt securities		5,816		183		---		---
Other		---		---		133		172
Total temporarily impaired securities	$	88,503	$	1,348	$	389	$	173

	December 31, 2011
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily impaired securities:
U.S. Government agencies and corporations	$	6,230	$	20	$	---	$	---
States and political subdivisions		3,527		19		981		26
Corporate debt securities		4,916		97		---		---
Other		---		---		142		162
Total temporarily impaired securities	$	14,673	$	136	$	1,123	$	188

The Company had 96 securities with a fair value of $88,892 which were temporarily impaired at March 31, 2012. The total unrealized loss on these securities was $1,521. Of the temporarily impaired total, two securities with a fair value of $389 and an unrealized loss of $173 have been in a continuous loss position for twelve months or more. The Company has determined that these securities are temporarily impaired at March 31, 2012 for the reasons set out below.

U.S. Government agencies. The unrealized losses in this category of investments were caused by interest rate and market fluctuations. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and it is not likely that the Company will be required to sell any of these investments before recovery of its amortized cost basis, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

States and political subdivisions. This category’s unrealized losses are primarily the result of interest rate and market fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and it is not likely that the Company will be required to sell any of the investments before recovery of its amortized cost basis, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Corporate debt securities. The Company’s unrealized losses in corporate debt securities are related to interest rate and market fluctuations and to ratings downgrades for a limited number of securities. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments before recovery of its amortized cost basis, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Other. The Company holds an investment in an LLC and a small amount of community bank stock. The value of these investments has been negatively affected by market conditions. Because the Company does not intend to sell these investments before recovery of amortized cost basis, the Company does not consider these investments to be other-than-temporarily impaired.

As a member of the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Atlanta, NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital and a percentage of qualifying assets. In addition, NBB is eligible to borrow from the FHLB with borrowings collateralized by qualifying assets, primarily residential mortgage loans and NBB’s capital stock investment in the FHLB. Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at March 31, 2012, management did not consider there to be any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully follow any changes in bond quality. Refer to “Securities” in this report for additional information.