Investment Securities

9 Months Ended

Sep. 30, 2012

Investment Securities [Abstract]

Investment Securities

Note D – Investment Securities

Investments in Federal Home Loan Bank and Federal Reserve Bank stock are combined and classified separately from investment securities in the condensed consolidated balance sheet, are restricted and may only be resold to, or redeemed by, the issuer.

Investment securities consisted of the following (in $1,000s):

	September 30, 2012				December 31, 2011
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Available for sale:
United States treasury	$	3,498	$	3,500	$	4,004	$	4,013
United States government agency		2,000		2,000
Mortgage-backed		8,996		9,126		10,537		10,592
Municipalities		103		105		275		278
		14,597		14,731		14,816		14,883
Held for long-term investment:
Capitol Development Bancorp Limited III		780		780		973		973
Other equity investments		1,859		1,859		1,764		1,764
		2,639		2,639		2,737		2,737
	$	17,236	$	17,370	$	17,553	$	17,620

Securities held for long-term investment are not subject to the classification and accounting rules relating to most typical investments.  In addition, Capitol's other equity investments consist mostly of equity-method investments in non-public enterprises which, accordingly, are outside of the scope of accounting rules for most typical investments which often require use of estimated fair value.  Those entities, which are primarily involved in making equity investments in or financing small businesses, use the fair value method of accounting in valuing their investment portfolios.  Notwithstanding that those investments are outside the scope of such accounting rules, they are included in Capitol's investment securities for financial reporting purposes in order to summarize all such investment securities together for reporting purposes.

Gross unrealized gains and losses on investment securities available for sale were as follows (in $1,000s):

	September 30, 2012				December 31, 2011
	Gains		Losses		Gains		Losses
United States treasury	$	2	$	--	$	9
United States government agency
Mortgage-backed		130				70	$	16
Municipalities		2				4
	$	134	$	--	$	83	$	16

The age of gross unrealized losses and carrying value (at estimated fair value) of securities available for sale as of December 31, 2011 (none as of September 30, 2012) are summarized below (in $1,000s):

	Unrealized Loss		Carrying Value
One year or less:
Mortgage-backed	$	16	$	6,674

Gross realized gains and losses from sales and maturities of investment securities were insignificant for each of the periods presented.

Scheduled maturities of investment securities held as of September 30, 2012 were as follows (in $1,000s):

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	3,503	$	3,505
After one year, through five years		2,103		2,106
After ten years		8,991		9,120
Securities held for long-term investment without stated maturities		2,639		2,639
	$	17,236	$	17,370