UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
_____________________________

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

       For the quarterly period ended September 30, 2012

OR
[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
     For the transition period from _______ to _______

Commission File Number: 000-23601

PATHFINDER BANCORP, INC.
(Exact Name of Company as Specified in its Charter)
 
FEDERAL
16-1540137
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification Number)

214 West First Street, Oswego, NY 13126
(Address of Principal Executive Office) (Zip Code)

(315) 343-0057
(Issuer's Telephone Number including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES T        NO *                                

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES T        NO *

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer*                            Accelerated filer*                                 Non-accelerated filer*                       Smaller reporting company  T
                           (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   YES *    NO T

As of November 12, 2012, there were 2,979,969 shares issued and 2,617,682 shares outstanding of the registrant’s common stock.

 
 

 




PATHFINDER BANCORP, INC.
INDEX



PART I - FINANCIAL INFORMATION
 
PAGE NO.
 
         
Item 1.
Consolidated Financial Statements (Unaudited)
     
 
Consolidated Statements of Condition
    3  
 
Consolidated Statements of Income
    4  
 
Consolidated Statements of Comprehensive Income
    5  
 
Consolidated Statements of Changes in Shareholders' Equity
    6  
 
Consolidated Statements of Cash Flows
    7  
 
Notes to Consolidated Financial Statements
    8  
           
Item 2.
Management's Discussion and Analysis of Financial Condition
    28  
 
and Results of Operations
       
           
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    39  
           
Item 4.
Controls and Procedures
    39  
           
PART II - OTHER INFORMATION
    40  
           
Item 1.
Legal proceedings
       
Item 1A.
Risk Factors
       
Item 2.
Unregistered sales of equity securities and use of proceeds
       
Item 3.
Defaults upon senior securities
       
Item 4.
Mine Safety Disclosures
       
Item 5.
Other information
       
Item 6.
Exhibits
       
           
SIGNATURES
    41  
           
EXHIBITS
      42  

 
 

 

PART I -  FINANCIAL INFORMATION
Item 1 – Consolidated Financial Statements

Pathfinder Bancorp, Inc.
Consolidated Statements of Condition
(Unaudited)

   
September 30,
   
December 31,
 
(In thousands, except share data)
 
2012
   
2011
 
ASSETS:
           
Cash and due from banks
  $ 9,349     $ 7,093  
Interest earning deposits
    4,725       3,125  
Total cash and cash equivalents
    14,074       10,218  
Interest earning time deposits
    2,000       2,000  
Investment securities, at fair value
    114,312       100,395  
Federal Home Loan Bank stock, at cost
    1,910       1,528  
Loans
    324,150       304,750  
Less: Allowance for loan losses
    4,433       3,980  
Loans receivable, net
    319,717       300,770  
Premises and equipment, net
    10,197       10,697  
Accrued interest receivable
    1,921       1,685  
Foreclosed real estate
    429       536  
Goodwill
    3,840       3,840  
Bank owned life insurance
    8,137       7,939  
Other assets
    2,826       3,372  
Total assets
  $ 479,363     $ 442,980  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY:
               
Deposits:
               
Interest-bearing
  $ 349,355     $ 328,976  
Noninterest-bearing
    44,483       37,153  
Total deposits
    393,838       366,129  
Short-term borrowings
    9,000       -  
Long-term borrowings
    25,991       26,074  
Junior subordinated debentures
    5,155       5,155  
Accrued interest payable
    129       145  
Other liabilities
    4,311       7,636  
Total liabilities
    438,424       405,139  
Shareholders' equity:
               
Preferred stock - SBLF, par value $0.01 per share; $1,000 liquidation preference;
               
13,000 shares authorized; 13,000 shares issued and outstanding
    13,000       13,000  
Common stock, par value $0.01; authorized 10,000,000 shares;
               
2,979,969 and 2,617,682 shares issued and outstanding, respectively
    30       30  
Additional paid in capital
    8,098       8,730  
Retained earnings
    26,114       24,618  
Accumulated other comprehensive loss
    (505 )     (2,664 )
Unearned ESOP
    (964 )     (1,039 )
Treasury stock, at cost; 362,287 shares
    (4,834 )     (4,834 )
Total shareholders' equity
    40,939       37,841  
Total liabilities and shareholders' equity
  $ 479,363     $ 442,980  

The accompanying notes are an integral part of the consolidated financial statements.

 
- 3

 

Pathfinder Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)

   
For the three
   
For the three
   
For the nine
   
For the nine
 
 
 
months ended
   
months ended
   
months ended
   
months ended
 
(In thousands, except per share data)
 
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30, 2011
 
Interest and dividend income:
                       
Loans, including fees
  $ 3,974     $ 4,089     $ 11,962     $ 11,945  
Debt securities:
                               
Taxable
    439       489       1,386       1,687  
Tax-exempt
    190       81       535       230  
Dividends
    38       33       97       101  
Interest earning time deposits
    6       -       18       -  
Federal funds sold and interest earning deposits
    1       1       3       3  
       Total interest income
    4,648       4,693       14,001       13,966  
Interest expense:
                               
Interest on deposits
    714       810       2,211       2,444  
Interest on short-term borrowings
    6       4       14       22  
Interest on long-term borrowings
    243       259       750       816  
       Total interest expense
    963       1,073       2,975       3,282  
          Net interest income
    3,685       3,620       11,026       10,684  
Provision for loan losses
    275       145       650       670  
          Net interest income after provision for loan losses
    3,410       3,475       10,376       10,014  
Noninterest income:
                               
Service charges on deposit accounts
    285       283       838       854  
Earnings and gain on bank owned life insurance
    46       45       235       162  
Loan servicing fees
    51       63       159       155  
Net gains on sales and redemptions of investment securities
    18       469       179       791  
Net gains (losses) on sales of loans and foreclosed real estate
    6       (80 )     31       (40 )
Debit card interchange fees
    105       93       308       273  
Other charges, commissions & fees
    150       130       423       403  
          Total noninterest income
    661       1,003       2,173       2,598  
Noninterest expense:
                               
Salaries and employee benefits
    1,733       1,787       5,576       5,260  
Building occupancy
    348       316       1,077       1,038  
Data processing
    390       349       1,072       1,054  
Professional and other services
    174       219       473       504  
Advertising
    108       91       268       366  
FDIC assessments
    78       (8 )     233       316  
Audits and exams
    73       62       184       181  
Other expenses
    274       392       1,106       1,175  
          Total noninterest expenses
    3,178       3,208       9,989       9,894  
Income before income taxes
    893       1,270       2,560       2,718  
Provision for income taxes
    223       396       641       831  
Net income
    670       874       1,919       1,887  
Preferred stock dividends and discount accretion
    113       581       367       816  
Net income available to common shareholders
  $ 557     $ 293     $ 1,552     $ 1,071  
                                 
Earnings per common share - basic
  $ 0.22     $ 0.12     $ 0.62     $ 0.43  
Earnings per common share - diluted
  $ 0.22     $ 0.11     $ 0.62     $ 0.42  
Dividends per common share
  $ 0.03     $ 0.03     $ 0.09     $ 0.09  

The accompanying notes are an integral part of the consolidated financial statements.
 
 
- 4

 
Pathfinder Bancorp, Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
   
For the three
   
For the three
   
For the nine
   
For the nine
 
   
months ended
   
months ended
   
months ended
   
months ended
 
   
September 30,
   
September 30,
   
September 30,
   
September 30,
 
(In thousands)
 
2012
   
2011
   
2012
   
2011
 
                         
Retirement Plans:
                       
Retirement plan net losses recognized in plan expenses
  $ 78     $ 67     $ 318     $ 200  
                                 
    Gain on pension plan curtailment
    -       -       1,919       -  
                                 
Unrealized holding loss on financial derivative:
                               
Change in unrealized holding loss on financial derivative
    (18 )     (87 )     (53 )     (141 )
Reclassification adjustment for interest expense included in net income
    13       17       43       46  
Net unrealized loss on financial derivative
    (5 )     (70 )     (10 )     (95 )
                                 
Unrealized holding gains (losses) on available-for-sale securities:
                               
Unrealized holding gains arising during the period
    939       316       1,551       2,430  
Reclassification adjustment for net gains included in income
    (18 )     (469 )     (179 )     (791 )
Net unrealized gains (losses) on securities available-for-sale
    921       (153 )     1,372       1,639  
                                 
Other comprehensive income (loss), before tax
    994       (156 )     3,599       1,744  
Tax effect
    (397 )     62       (1,440 )     (699 )
Other comprehensive income (loss), net of tax
    597       (94 )     2,159       1,045  
                                 
Net Income
    670       874       1,919       1,887  
Comprehensive Income
  $ 1,267     $ 780     $ 4,078     $ 2,932  
                                 
Tax Effect Allocated to Each Component of Other Comprehensive Income
                               
                                 
Retirement plan net losses recognized in plan expenses
  $ (31 )   $ (27 )   $ (127 )   $ (80 )
Gain on pension plan curtailment
    -       -       (768 )     -  
Unrealized loss on financial derivative
    2       28       4       38  
Unrealized gains on available-for-sale securities
    (368 )     61       (549 )     (657 )
Income tax effect related to other comprehensive income
  $ (397 )   $ 62     $ (1,440 )   $ (699 )
                                 
                                 
   
As of
   
As of
                 
   
September 30,
   
December 31,
                 
Accumulated Other Comprehensive Loss By Component:
    2012       2011                  
Unrealized loss for pension and other postretirement obligations
  $ (3,792 )   $ (6,029 )                
Tax effect
    1,517       2,412                  
Net unrealized loss for pension and other postretirement obligations
    (2,275 )     (3,617 )                
Unrealized loss on financial derivative instruments used in cash flow hedging relationships
    (210 )     (200 )                
Tax effect
    84       80                  
Net unrealized loss on financial derivative instruments used in cash flow hedging relationships
    (126 )     (120 )                
Unrealized gains on available-for-sale securities
    3,161       1,789                  
Tax effect
    (1,265 )     (716 )                
Net unrealized gains on available-for-sale securities
    1,896       1,073                  
Accumulated other comprehensive loss
  $ (505 )   $ (2,664 )                

The accompanying notes are an integral part of the consolidated financial statements.
 

 
 
- 5

 

PATHFINDER BANCORP, INC.
 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
 
Nine months ended September 30, 2012 and September 30, 2011
 
 
   
       
         (Unaudited)                                
                                                 
                           
Accumulated
                   
               
Additional
         
Other Com-
                   
   
Preferred
   
Common
   
Paid in
   
Retained
   
prehensive
   
Unearned
   
Treasury
       
 (In thousands, except share data)
 
Stock
   
Stock
   
Capital
   
Earnings
   
Loss
   
ESOP
   
Stock
   
Total
 
 Balance, January 1, 2012
  $ 13,000     $ 30     $ 8,730     $ 24,618     $ (2,664 )   $ (1,039 )   $ (4,834 )   $ 37,841  
 Comprehensive income:
                                                               
 Net income
                            1,919                               1,919  
 Other comprehensive income (loss), net of tax:
                                                               
 Unrealized holding gains on securities
                                                               
 available for sale (net of $549 tax expense)
                                    823                       823  
 Unrealized holding losses on financial
                                                               
 derivative (net of $4 tax benefit)
                                    (6 )                     (6 )
 Retirement plan net losses
                                                               
 recognized in plan expenses
                                                               
 (net of $127 tax expense)
                                    191                       191  
 Defined benefit plan freeze
                                                               
 (net of $768 tax expense)
                                    1,151                       1,151  
 Total comprehensive income
                                                            4,078  
                                                                 
 Purchase of CPP Warrants from Treasury
                    (706 )     169                               (537 )
 Preferred stock dividends - SBLF
                            (367 )                             (367 )
 ESOP shares earned (8,520 shares)
                    6                       75               81  
 Stock based compensation
                    68                                       68  
 Common stock dividends declared ($0.09 per share)
                            (225 )                             (225 )
 Balance, September 30, 2012
  $ 13,000     $ 30     $ 8,098     $ 26,114     $ (505 )   $ (964 )   $ (4,834 )   $ 40,939  
                                                                 
Balance, January 1, 2011
  $ 6,225     $ 30     $ 8,615     $ 24,163     $ (1,939 )   $ -     $ (6,502 )   $ 30,592  
 Comprehensive income:
                                                               
 Net income
                            1,887                               1,887  
 Other comprehensive income (loss), net of tax:
                                                               
 Unrealized holding gains on securities
                                                               
 available for sale (net of $657 tax expense)
                                    982                       982  
 Unrealized holding loss on financial
                                                               
 derivative (net of $38 tax benefit)
                                    (57 )                     (57 )
 Retirement plan amortization and transition
                                                               
 obligation recognized in plan expenses
                                                               
 (net of $80 tax expense)
                                    120                       120  
 Total comprehensive income
                                                            2,932  
 Sale of preferred stock - SBLF
    13,000                                                       13,000  
 Redemption of CPP Preferred stock
    (6,771 )                                                     (6,771 )
 Preferred stock discount accretion
    546                       (546 )                             -  
 Preferred stock dividends - CPP
                            (270 )                             (270 )
 Sale of treasury stock to ESOP
                            (566 )             (1,102 )     1,668       -  
 ESOP shares earned (3,445 shares)
                    1                       31               32  
 Stock based compensation
                    25                                       25  
 Stock options exercised
                    66                                       66  
 Common stock dividends declared ($0.09 per share)
                            (224 )                             (224 )
Balance, September 30, 2011
  $ 13,000     $ 30     $ 8,707     $ 24,444     $ (894 )   $ (1,071 )   $ (4,834 )   $ 39,382  
 
The accompanying notes are an integral part of the consolidated financial statements.

 
- 6

 

Pathfinder Bancorp, Inc.
Consolidated Statements of Cash Flows
 (Unaudited)
   
For the nine
 
   
months ended
 
(In thousands)
 
September 30, 2012
   
September 30, 2011
 
OPERATING ACTIVITIES
           
Net income
  $ 1,919     $ 1,887  
Adjustments to reconcile net income to net cash flows from operating activities:
               
Provision for loan losses
    650       670  
Proceeds from sales of loans
    207       -  
Originations of loans held-for-sale
    (195 )     -  
Realized (gains) losses on sales and redemptions of:
               
Real estate acquired through foreclosure
    (19 )     40  
Loans
    (12 )     -  
Available-for-sale investment securities
    (179 )     (791 )
Depreciation
    593       523  
Amortization of mortgage servicing rights
    6       20  
Amortization of deferred loan costs
    132       139  
Earnings on bank owned life insurance
    (198 )     (162 )
Realized gain on proceeds from bank owned life insurance
    (37 )     -  
Net amortization of premiums and discounts on investment securities
    851       370  
Stock based compensation and ESOP expense
    149       57  
Net change in accrued interest receivable
    (236 )     90  
Pension plan contribution
    (2,600 )     -  
Net change in other assets and liabilities
    734       (30 )
Net cash flows from operating activities
    1,765       2,813  
INVESTING ACTIVITIES
               
Purchase of investment securities available-for-sale
    (44,429 )     (39,603 )
(Purchases) redemptions of Federal Home Loan Bank stock
    (382 )     606  
Proceeds from maturities and principal reductions of
               
investment securities available-for-sale
    20,859       25,894  
Proceeds from sales and redemptions of:
               
Available-for-sale investment securities
    10,353       15,091  
Real estate acquired through foreclosure
    331       691  
Purchase of bank owned life insurance
    -       (800 )
Net change in loans
    (20,020 )     (10,371 )
Purchase of premises and equipment
    (93 )     (1,750 )
Net cash flows from investing activities
    (33,381 )     (10,242 )
FINANCING ACTIVITIES
               
Net change in demand deposits, NOW accounts, savings accounts,
               
money management deposit accounts, MMDA accounts and escrow deposits
    17,698       15,928  
Net change in time deposits and brokered deposits
    10,011       624  
Net change in short-term borrowings
    9,000       (11,000 )
Payments on long-term borrowings
    (4,083 )     (6,000 )
Proceeds from long-term borrowings
    4,000       4,101  
Proceeds from sale of preferred stock - SBLF
    -       13,000  
Proceeds from exercise of stock options
    -       66  
Redemption of preferred stock - CPP
    -       (6,771 )
Purchase of CPP warrants from the US Treasury
    (537 )     -  
Cash dividends paid to preferred shareholder - SBLF and CPP
    (392 )     (270 )
Cash dividends paid to common shareholders
    (225 )     (224 )
Net cash flows from financing activities
    35,472       9,454  
Change in cash and cash equivalents
    3,856       2,025  
Cash and cash equivalents at beginning of period
    10,218       13,763  
Cash and cash equivalents at end of period
  $ 14,074     $ 15,788  
CASH PAID DURING THE PERIOD FOR:
               
Interest
  $ 2,991     $ 3,299  
Income taxes
    3       1,507  
NON-CASH INVESTING ACTIVITY
               
Transfer of loans to foreclosed real estate
    291       921  

The accompanying notes are an integral part of the consolidated financial statements.

 
- 7

 

Notes to Consolidated Financial Statements (Unaudited)
 
 
(1)  Basis of Presentation

The accompanying unaudited consolidated financial statements of Pathfinder Bancorp, Inc. and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes necessary for a complete presentation of consolidated financial position, results of operations and cash flows in conformity with generally accepted accounting principles.  In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included.  Certain amounts in the 2011 consolidated financial statements may have been reclassified to conform to the current period presentation.  These reclassifications had no effect on net income as previously reported.

The following material under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" is written with the presumption that the users of the interim financial statements have read, or have access to, the Company's latest audited financial statements and notes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2011 and 2010 and for the two years then ended.  Therefore, only material changes in financial condition and results of operations are discussed in the remainder of Part 1.

Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

(2)  New Accounting Pronouncements

None applicable to the Company.

(3)  Earnings per Common Share

Basic earnings per share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period.  Net income available to common shareholders is net income less the total of preferred dividends declared and the amortization of the preferred stock discount value under the CPP program during 2011.  Diluted earnings per share include the potential dilutive effect that could occur upon the assumed exercise of issued stock options and the warrants issued to the U.S. Treasury using the treasury stock method.  Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released to plan participants.

The following table sets forth the calculation of basic and diluted earnings per share:

   
Three months ended
   
Nine months ended
 
   
September 30,
   
September 30,
 
(In thousands, except per share data)
 
2012
   
2011
   
2012
   
2011
 
Basic Earnings Per Common Share
                       
Net income available to common shareholders
  $ 557     $ 293     $ 1,552     $ 1,071  
Weighted average common shares outstanding
    2,505       2,493       2,503       2,488  
Basic earnings per common share
  $ 0.22     $ 0.12     $ 0.62     $ 0.43  
                                 
Diluted Earnings Per Common Share
                               
Net income available to common shareholders
  $ 557     $ 293     $ 1,552     $ 1,071  
Weighted average common shares outstanding
    2,505       2,493       2,503       2,488  
Effect of assumed exercise of stock options
    12       11       6       5  
Effect of assumed exercise of stock warrants
    -       43       4       43  
Diluted weighted average common shares outstanding
    2,517       2,547       2,513       2,536  
Diluted earnings per common share
  $ 0.22     $ 0.11     $ 0.62     $ 0.42  


 
- 8

 

 
(4) Investment Securities - Available-for-Sale

The amortized cost and estimated fair value of investment securities are summarized as follows:

   
September 30, 2012
 
         
Gross
   
Gross
   
Estimated
 
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
(In thousands)
 
Cost
   
Gains
   
Losses
   
Value
 
Debt investment securities:
                       
US Treasury, agencies and GSEs
  $ 5,176     $ 26     $ -     $ 5,202  
State and political subdivisions
    25,994       1,122       (2 )     27,114  
Corporate
    24,042       382       (525 )     23,899  
Residential mortgage-backed - US agency
    52,797       1,768       (1 )     54,564  
Residential mortgage-backed - private label
    346       11       -       357  
Total
    108,355       3,309       (528 )     111,136  
Equity investment securities:
                               
Mutual funds:
                               
Ultra short mortgage fund
    1,286       14       -       1,300  
Large cap equity fund
    905       243       -       1,148  
Other mutual funds
    183       114       -       297  
Common stock - financial services industry
    422       10       (1 )     431  
Total
    2,796       381       (1 )     3,176  
Total investment securities
  $ 111,151     $ 3,690     $ (529 )   $ 114,312  

                         
                         
   
December 31, 2011
 
         
Gross
   
Gross
   
Estimated
 
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
(In thousands)
 
Cost
   
Gains
   
Losses
   
Value
 
Debt investment securities:
                       
US Treasury, agencies and GSEs
  $ 5,025     $ 48     $ -     $ 5,073  
State and political subdivisions
    19,508       797       (1 )     20,304  
Corporate
    21,086       38       (690 )     20,434  
Residential mortgage-backed - US agency
    49,665       1,395       (4 )     51,056  
Residential mortgage-backed - private label
    505       14       -       519  
Total
    95,789       2,292       (695 )     97,386  
Equity investment securities:
                               
Mutual funds:
                               
Ultra short mortgage fund
    1,286       12       -       1,298  
Large cap equity fund
    905       119       -       1,024  
Other mutual funds
    183       60       -       243  
Common stock - financial services industry
    443       2       (1 )     444  
Total
    2,817       193       (1 )     3,009  
Total investment securities
  $ 98,606     $ 2,485     $ (696 )   $ 100,395  
 

 
 
- 9

 

The amortized cost and estimated fair value of debt investments at September 30, 2012 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

   
Amortized
   
Estimated
 
   
Cost
   
Fair Value
 
(In thousands)
           
Due in one year or less
  $ 7,294     $ 7,329  
Due after one year through five years
    22,421       22,887  
Due after five years through ten years
    7,042       7,478  
Due after ten years
    18,455       18,521  
Mortgage-backed securities
    53,143       54,921  
Totals
  $ 108,355     $ 111,136  

The Company’s investment securities’ 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, are as follows:

                           
September 30, 2012
                   
 
       
Less than Twelve Months
         
Twelve Months or More
         
Total
 
   
Number of
               
Number of
               
Number of
             
   
Individual
   
Unrealized
   
Fair
   
Individual
   
Unrealized
   
Fair
   
Individual
   
Unrealized
   
Fair
 
   
Securities
   
Losses
   
Value
   
Securities
   
Losses
   
Value
   
Securities
   
Losses
   
Value
 
(Dollars in thousands)
       
 
                                           
State and political subdivisions
    4     $ (2 )   $ 1,475       -     $ -     $ -       4     $ (2 )   $ 1,475  
Corporate
    4       (37 )     2,633       2       (488 )     1,481       6       (525 )     4,114  
Residential mortgage-backed - US agency
    2       (1 )     1,018       -       -       -       2       (1 )     1,018  
Common stock-financial services industry
    1       (1 )     2       -       -       -       1       (1 )     2  
Totals
    11     $ (41 )   $ 5,128       2     $ (488 )   $ 1,481       13     $ (529 )   $ 6,609  
 
                                                                       
 
                                                                       
                                   
December 31, 2011
                         
 
         
Less than Twelve Months
           
Twelve Months or More
           
Total
 
   
Number of
                   
Number of
                   
Number of
                 
   
Individual
   
Unrealized
   
Fair
   
Individual
   
Unrealized
   
Fair
   
Individual
   
Unrealized
   
Fair
 
   
Securities
   
Losses
   
Value
   
Securities
   
Losses
   
Value
   
Securities
   
Losses
   
Value
 
(Dollars in thousands)
                                                                       
State and political subdivisions
    1     $ (1 )   $ 412       -     $ -     $ -       1     $ (1 )   $ 412  
Corporate
    19       (131 )     13,489       2       (559 )     1,410       21       (690 )     14,899  
Residential mortgage-backed - US agency
    2       (4 )     1,896       -       -       -       2       (4 )     1,896  
Common stock-financial services industry
    -       -       -       1