NOTE 2 –SECURITIES

Amortized cost and fair value of investment securities, by category, at March 31, 2013 are summarized as follows:

2013	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	31,987	$	1,665	$	-		$	33,652
U. S. sponsored agency CMO's - residential		214,658		6,118		(57	)		220,719
Total mortgage-backed securities of government sponsored agencies		246,645		7,783		(57	)		254,371
U. S. government sponsored agency securities		10,076		106		(2	)		10,180
Obligations of states and political subdivisions		7,408		418		-			7,826
Other securitiessubdivisions		2,041		1,062		(72	)		3,031
Total available for sale	$	266,170	$	9,369	$	(131	)	$	275,408

Amortized cost and fair value of investment securities, by category, at December 31, 2012 are summarized as follows:

2012	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	35,172	$	1,928	$	-		$	37,100
U. S. sponsored agency CMO's - residential		206,466		6,392		(11	)		212,847
Total mortgage-backed securities of government sponsored agencies		241,638		8,320		(11	)		249,947
U. S. government sponsored agency securities		22,062		182		-			22,244
Obligations of states and political subdivisions		7,419		441		-			7,860
Other securitiessubdivisions		2,892		1,105		(73	)		3,924
Total available for sale	$	274,011	$	10,048	$	(84	)	$	283,975

The amortized cost and fair value of securities at March 31, 2013 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Available for sale
Due in one year or less	$	727	$	675
Due after one year through five years		11,621		12,061
Due after five years through ten years		5,708		5,789
Due after ten years		377		864
Corporate preferred securities		1,092		1,648
Mortgage-backed securities of government sponsored agencies		246,645		254,371
Total available for sale	$	266,170	$	275,408

Securities with unrealized losses at March 31, 2013 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss

U.S. government sponsored agency securities	$	2,998	$	(2	)	$	-	$	-		$	2,998	$	(2	)
U.S government sponsored agency CMO – residential		14,298		(57	)		-		-			14,298		(57	)
Other securities		-		-			4		(72	)		4		(72	)

Total temporarily impaired	$	17,296	$	(59	)	$	4	$	(72	)	$	17,300	$	(131	)

Securities with unrealized losses at December 31, 2012 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss

U.S government sponsored agency CMO – residential	$	2,077	$	(11	)	$	-	$	-		$	2,077	$	(11	)
Other securities		-		-			4		(73	)		4		(73	)

Total temporarily impaired	$	2,077	$	(11	)	$	4	$	(73	)	$	2,081	$	(84	)

The investment portfolio is predominately high quality interest-bearing debt securities with defined maturity dates backed by the U.S. Government or Government sponsored entities. The unrealized losses at March 31, 2013 and December 31, 2012 are price changes resulting from changes in the interest rate environment and are not considered to be other than temporary declines in the value of the securities. Their fair value is expected to recover as the bonds approach their maturity date and/or market conditions improve.