NOTE 4 – INVESTMENTS IN SECURITIES

The amortized cost of available for sale and held-to-maturity securities and their approximate fair values are as follows (in thousands):

There were no available-for-sale securities at December 31, 2011.

The amortized cost and estimated fair value of debt securities by contractual maturity at September 30, 2012 is as follows (in thousands). Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. During the nine months ended September 30, 2011 (unaudited), proceeds from sales of available-for-sale securities amounted to $15.7 million. For the nine months ended September 30, 2011 (unaudited) gross realized gains and gross realized losses on those sales amounted to $2.8 million and $56,000, respectively. For the nine months ended September 30, 2011 (unaudited) the income tax expense (benefit) related to the gross gains and losses were $1.1 million and ($23,000), respectively. During the nine months ended September 30, 2012 (unaudited), there were no security sales.

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows (in thousands):

There were no securities in an unrealized loss position at September 30, 2012.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. At September 30, 2012 (unaudited), no securities were in an unrealized loss position. When there are securities in an unrealized loss position, consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) 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. Based on the Company’s September 30, 2012 (unaudited) quarterly review of securities in the investment portfolio, management has determined that there are no securities with unrealized losses. At December 31, 2011, unrealized losses related to nine debt securities with aggregate depreciation of 0.8% from the Company’s amortized cost basis were caused primarily by changes in market interest rates. Based on the Company’s December 31, 2011 review of securities in the investment portfolio, management deemed securities with unrealized losses as of December 31, 2011 to be temporarily impaired.

The investment securities portfolio is generally evaluated for other-than-temporary impairment under ASC 320-10, “Investments - Debt and Equity Securities.”