Note 3 - Investment Securities

9 Months Ended

Sep. 30, 2012

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 3: INVESTMENT SECURITIES

The amortized cost and fair value of investment securities that are classified as held-to-maturity and available-for-sale are as follows:

	September 30, 2012									December 31, 2011
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value
Held-to-Maturity
U.S. Treasury	$	--	$	--	$	--		$	--	$	4,000	$	14	$	--		$	4,014
U.S. Government agencies		303,640		297		(32	)		303,905		308,779		712		(154	)		309,337
Mortgage-backed securities		51		2		--			53		62		1		--			63
State and political subdivisions		206,319		5,619		(97	)		211,841		211,673		6,333		(144	)		217,862
Other securities		620		--		--			620		930		--		--			930
	$	510,630	$	5,918	$	(129	)	$	516,419	$	525,444	$	7,060	$	(298	)	$	532,206
Available-for-Sale
U.S. Government agencies	$	164,300	$	196	$	(29	)	$	164,467	$	153,560	$	295	$	(228	)	$	153,627
Mortgage-backed securities		23,998		354		(19	)		24,333		2,280		277		--			2,557
Other securities		15,817		438		(4	)		16,251		15,649		384		(5	)		16,028
	$	204,115	$	988	$	(52	)	$	205,051	$	171,489	$	956	$	(233	)	$	172,212

Certain investment securities are valued at less than their historical cost.  These declines primarily resulted from the rate for these investments yielding less than current market rates.  Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary.  Management does not have the intent to sell these securities and management believes it is more likely than not the Company will not have to sell these securities before recovery of their amortized cost basis less any current period credit losses.  Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

As of September 30, 2012, securities with unrealized losses, segregated by length of impairment, were as follows:

	Less Than 12 Months					12 Months or More					Total
(In thousands)	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Held-to-Maturity
U.S. Government agencies	$	38,991	$	(32	)	$	--	$	--		$	38,991	$	(32	)
State and political subdivisions		3,698		(7	)		657		(90	)		4,355		(97	)
Total	$	42,689	$	(39	)	$	657	$	(90	)	$	43,346	$	(129	)
Available-for-Sale
U.S. Government agencies	$	32,971	$	(29	)	$	--	$	--		$	32,971	$	(29	)
State and political subdivisions		1,330		(19	)		--		--			1,330		(19	)
Other securities		1		(4	)		--		--			1		(4	)
Total	$	34,302	$	(52	)	$	--	$	--		$	34,302	$	(52	)

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses.  In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company expects to receive full value for the securities.  Furthermore, as of September 30, 2012, management also had the ability and intent to hold the securities classified as available-for-sale for a period of time sufficient for a recovery of cost.  The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.  The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline.  Management does not believe any of the securities are impaired due to reasons of credit quality.  Accordingly, as of September 30, 2012, management believes the impairments detailed in the table above are temporary.

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $440,899,000 at September 30, 2012, and $410,702,000 at December 31, 2011.

The book value of securities sold under agreements to repurchase amounted to $53,369,000 and $83,556,000 for September 30, 2012, and December 31, 2011, respectively.

Income earned on securities for the three and nine months ended September 30, 2012 and 2011, is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Taxable
Held-to-maturity	$	707	$	942	$	2,389	$	3,243
Available-for-sale		514		646		1,624		1,851
Non-taxable
Held-to-maturity		1,806		1,951		5,602		5,921
Total	$	3,027	$	3,539	$	9,615	$	11,015

Maturities of investment securities at September 30, 2012, are as follows:

	Held-to-Maturity				Available-for-Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	55,281	$	55,366	$	7,876	$	7,876
After one through five years		220,080		220,927		83,841		84,020
After five through ten years		159,352		161,275		74,840		75,099
After ten years		75,917		78,851		21,741		21,804
Other securities		--		--		15,817		16,252
Total	$	510,630	$	516,419	$	204,115	$	205,051

There were no realized gains or losses on investment securities for the three and nine months ended September 30, 2012 or 2011.

The state and political subdivision debt obligations are primarily non-rated bonds and represent small, Arkansas issues, which are evaluated on an ongoing basis.