Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2011

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of June 30, 2011 and December 31, 2010 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
June 30, 2011:
Securities held to maturity, other bonds	$	300,000	$	-	$	-		$	300,000

Securities available for sale:
U.S. govt. sponsored agency securities	$	403,338,170	$	1,901,993	$	(1,474,226	)	$	403,765,937
Residential mortgage-backed securities		80,724,229		1,384,625		(70,733	)		82,038,121
Municipal securities		25,254,632		954,386		(9,069	)		26,199,949
Trust preferred securities		86,200		-		(13,000	)		73,200
Other securities		1,343,556		184,912		(949	)		1,527,519
	$	510,746,787	$	4,425,916	$	(1,567,977	)	$	513,604,726

December 31, 2010:
Securities held to maturity, other bonds	$	300,000	$	-	$	-		$	300,000

Securities available for sale:
U.S. govt. sponsored agency securities	$	401,711,432	$	3,218,843	$	(2,704,919	)	$	402,225,356
Residential mortgage-backed securities		64,912		5,526		-			70,438
Municipal securities		20,134,611		579,215		(110,346	)		20,603,480
Trust preferred securities		86,200		-		(8,200	)		78,000
Other securities		1,414,661		168,331		(13,499	)		1,569,493
	$	423,411,816	$	3,971,915	$	(2,836,964	)	$	424,546,767

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2011 and December 31, 2010, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
June 30, 2011:
Securities available for sale:
U.S. govt. sponsored agency securities	$	143,324,052	$	(1,474,226	)	$	-	$	-		$	143,324,052	$	(1,474,226	)
Residential mortgage-backed securities		8,430,313		(70,733	)		-		-			8,430,313		(70,733	)
Municipal securities		765,827		(6,415	)		226,840		(2,654	)		992,667		(9,069	)
Trust preferred securities		73,200		(13,000	)		-		-			73,200		(13,000	)
Other securities		-		-			2,752		(949	)		2,752		(949	)
	$	152,593,392	$	(1,564,374	)	$	229,592	$	(3,603	)	$	152,822,984	$	(1,567,977	)

December 31, 2010:
Securities available for sale:
U.S. govt. sponsored agency securities	$	159,302,061	$	(2,704,919	)	$	-	$	-		$	159,302,061	$	(2,704,919	)
Municipal securities		4,333,786		(47,884	)		678,378		(62,462	)		5,012,164		(110,346	)
Trust preferred securities		86,200		(8,200	)		-		-			86,200		(8,200	)
Other securities		226,250		(12,671	)		2,872		(828	)		229,122		(13,499	)
	$	163,948,297	$	(2,773,674	)	$	681,250	$	(63,290	)	$	164,629,547	$	(2,836,964	)

At June 30, 2011, the investment portfolio included 337 securities. Of this number, 84 securities had current unrealized losses with aggregate depreciation less than 1% from the amortized cost basis. Of these 84, two had unrealized losses for twelve months or more. All of the debt securities in unrealized loss positions are considered acceptable credit risks. Based upon an evaluation of the available evidence, including the recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary. In addition, the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these debt securities before their anticipated recovery. At June 30, 2011 and December 31, 2010, equity securities represented less than 1% of the total portfolio.

The Company did not recognize other-than-temporary impairment on any debt securities for the three and six months ended June 30, 2011 and 2010.

During the second quarter of 2011, the Company’s evaluation determined that two privately held equity securities experienced declines in fair value that were other-than-temporary. As a result, the Company wrote down the value of these securities and recognized losses in the amount of $118,847. The Company did not recognize other-than-temporary impairment on any of its equity securities during the first quarter of 2011. Additionally, the Company did not recognize other-than-temporary impairment on its equity securities for the three and six months ended June 30, 2010.

All sales of securities, as applicable, for the three and six months ended June 30, 2011 and 2010, respectively, were from securities identified as available for sale. Information on proceeds received, as well as pre-tax gross gains from sales of those securities is as follows:

	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010

Proceeds from sales of securities	$	8,331,005	$	-	$	45,725,084	$	-
Pre-tax gross gains from sales of securities		148,602		-		1,028,914		-

The amortized cost and fair value of securities as of June 30, 2011 by contractual maturity are shown below. A portion of the Company’s U.S. government sponsored agency securities contain call options which allow the issuer, at its discretion, to call the security at predetermined dates prior to the contractual maturity date. Expected maturities of residential mortgage-backed securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following table. Other securities are excluded from the maturity categories as there is no fixed maturity date.

	Amortized Cost		Fair Value
Securities held to maturity:
Due after one year through five years	$	250,000	$	250,000
Due after five years		50,000		50,000
	$	300,000	$	300,000

Securities available for sale:
Due in one year or less	$	6,707,952	$	6,728,343
Due after one year through five years		82,105,034		82,544,254
Due after five years		339,866,016		340,766,489
	$	428,679,002	$	430,039,086
Residential mortgage-backed securities		80,724,229		82,038,121
Other securities		1,343,556		1,527,519
	$	510,746,787	$	513,604,726

- Definition

The entire disclosure for investment holdings. This includes the long positions of investments for the entity. It contains investments in affiliated and unaffiliated issuers. The investments include securities and non securities (i.e. commodities and futures contracts).

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