Note 2 - Investment Securities

3 Months Ended

Sep. 30, 2011

NOTE 2 – INVESTMENT SECURITIES

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

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2011:
Securities held to maturity, other bonds	$	200,000	$	-	$	-		$	200,000

Securities available for sale:
U.S. govt. sponsored agency securities	$	412,874,368	$	2,280,889	$	(371,420	)	$	414,783,837
Residential mortgage-backed securities		80,069,540		3,382,915		-			83,452,455
Municipal securities		24,580,364		1,410,952		-			25,991,316
Trust preferred securities		86,200		-		(14,400	)		71,800
Other securities		1,346,972		106,442		(41,036	)		1,412,378
	$	518,957,444	$	7,181,198	$	(426,856	)	$	525,711,786

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 September 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
September 30, 2011:
Securities available for sale:
U.S. govt. sponsored agency securities	$	102,397,415	$	(371,420	)	$	-	$	-		$	102,397,415	$	(371,420	)
Trust preferred securities		71,800		(14,400	)		-		-			71,800		(14,400	)
Other securities		301,176		(40,510	)		2,725		(526	)		303,901		(41,036	)
	$	102,770,391	$	(426,330	)	$	2,725	$	(526	)	$	102,773,116	$	(426,856	)

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 September 30, 2011, the investment portfolio included 331 securities. Of this number, 54 securities had current unrealized losses with aggregate depreciation less than 1% from the amortized cost basis. Of these 54, one 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 September 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 nine months ended September 30, 2011. During the three months ended September 30, 2010, the Company’s evaluation determined the decline in fair value for one individual issue trust preferred security was other-than-temporary. As a result, the Company wrote down the value of this security and recognized a loss totaling $113,800. The Company does not have any other investments in trust preferred securities.

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 or third quarters of 2011. Additionally, the Company did not recognize other-than-temporary impairment on any of its equity securities for the three and nine months ended September 30, 2010.

All sales of securities, as applicable, for the three and nine months ended September 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				Nine Months Ended
	September 30, 2011		September 30, 2010		September 30, 2011		September 30, 2010

Proceeds from sales of securities	$	8,601,107	$	-	$	54,326,191	$	-
Pre-tax gross gains from sales of securities		443,614		-		1,472,528		-

The amortized cost and fair value of securities as of September 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 in one year or less	$	50,000	$	50,000
Due after one year through five years		100,000		100,000
Due after five years		50,000		50,000
	$	200,000	$	200,000

Securities available for sale:
Due in one year or less	$	2,803,210	$	2,811,980
Due after one year through five years		68,117,087		68,470,834
Due after five years		366,620,635		369,564,139
	$	437,540,932	$	440,846,953
Residential mortgage-backed securities		80,069,540		83,452,455
Other securities		1,346,972		1,412,378
	$	518,957,444	$	525,711,786