INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2012

INVESTMENT SECURITIES [Abstract]

Investment Securities

NOTE D—INVESTMENT SECURITIES

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

Investment securities consisted of the following at December 31 (in $1,000s):

	2012				2011
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Available for sale securities:
United States treasury	$	3,499	$	3,500	$	4,004	$	4,013
United States government agencies		4,000		3,987
Mortgage-backed		8,098		8,219		10,537		10,592
Municipalities						273		278
		15,597		15,706		14,814		14,883
Held for long-term investment:
CDBL III		765		765		973		973
Corporate		1,971		1,971		1,764		1,764
		2,736		2,736		2,737		2,737
	$	18,333	$	18,442	$	17,551	$	17,620

At December 31, 2012, securities with a fair value approximating $3.5 million were pledged to secure public and trust deposits and securities with a fair value approximating $2.7 million were pledged for other purposes as required by law.

Securities held for long-term investment are not subject to the classification and accounting rules relating to most typical investments.  In addition, Capitol's corporate 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 of the scope of such accounting rules, they are included in Capitol's investment securities for financial reporting purposes to summarize all such securities together.

Gross unrealized gains and losses on investment securities available for sale were as follows at December 31 (in $1,000s):

	2012				2011
	Gains		Losses		Gains		Losses
United States treasury	$	1			$	9
United States government agencies			$	13
Mortgage-backed		121				71	$	16
Municipalities						5
	$	122	$	13	$	85	$	16

The age of gross unrealized losses and carrying value (at estimated fair value) of securities available for sale are summarized below (in $1,000s):

	2012				2011
	Unrealized Loss		Carrying Value		Unrealized Loss		Carrying Value
One year or less:
United States government agencies	$	13	$	3,987
Mortgage-backed					$	16	$	6,674
	$	13	$	3,987	$	16	$	6,674

Management does not believe any individual unrealized loss as of December 31, 2012 represents an other-than-temporary loss (primarily due to such amounts being attributable to changes in interest rates).  Further, it does not intend to sell such securities and believes it is unlikely a sale would become required before the amortized cost can be recovered.

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 December 31, 2012 were as follows (in $1,000s):

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	3,501	$	3,502
After five years, through ten years		4,656		4,680
After ten years		7,440		7,524
Securities held for long-term investment, without stated maturities		2,736		2,736
	$	18,333	$	18,442