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Securities

3 Months Ended

Mar. 31, 2013

Securities [Abstract]

SECURITIES

5.	SECURITIES

Securities available for sale at March 31, 2013 and December 31, 2012 are as follows:


		March 31, 2013																December 31, 2012
		Amortized Cost				Unrealized								Fair Value				Amortized				Unrealized								Fair Value
		Amortized Cost				Gains				Losses				Fair Value				Cost				Gains				Losses				Fair Value
U.S. Treasury		$	2,013			$	12			$	0			$	2,025			$	4,018			$	18			$	0			$	4,036
U.S. Gov’t sponsored entities			187,548				5,615				(393	)			192,770				157,965				5,977				(161	)			163,781
State & political subdivisions			174,115				10,198				(159	)			184,154				170,223				11,113				(57	)			181,279
Residential & multi-family mortgage			289,153				7,932				(780	)			296,305				308,800				8,724				(702	)			316,822
Commercial mortgage			1,267				0				(3	)			1,264				1,275				29				0				1,304
Corporate notes & bonds			17,371				93				(2,128	)			15,336				17,368				26				(2,370	)			15,024
Pooled trust preferred			800				0				(242	)			558				800				0				(200	)			600
Pooled SBA			65,069				2,071				(139	)			67,001				50,667				2,277				(17	)			52,927
Other securities			1,521				11				0				1,532				1,521				17				0				1,538

Total		$	738,857			$	25,932			$	(3,844	)		$	760,945			$	712,637			$	28,181			$	(3,507	)		$	737,311

At March 31, 2013, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

Trading securities at March 31, 2013 and December 31, 2012 are as follows:


		March 31, 2013				December 31, 2012
Corporate equity securities		$	3,760			$	3,117
Certificates of deposit			358				408
International mutual funds			261				287
Large cap growth mutual funds			158				157
Money market mutual funds			79				110
Large cap value mutual funds			106				104
Corporate notes and bonds			101				101
Real estate investment trust mutual funds			68				65
U.S. Government sponsored entities			57				58
Small cap mutual funds			59				26
Mid cap mutual funds			59				26

Total		$	5,066			$	4,459

Securities with unrealized losses at March 31, 2013 and December 31, 2012, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (in thousands):

March 31, 2013


		Less than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Loss				Fair Value				Unrealized Loss				Fair Value				Unrealized Loss
U.S. Treasury		$	0			$	0			$	0			$	0			$	0			$	0
U.S. Gov’t sponsored entities			60,309				(393	)			0				0				60,309				(393	)
State & political subdivisions			16,547				(155	)			482				(4	)			17,029				(159	)
Residential & multi-family mortgage			43,505				(774	)			878				(6	)			44,383				(780	)
Commercial mortgage			1,264				(3	)			0				0				1,264				(3	)
Corporate notes & bonds			0				0				11,236				(2,128	)			11,236				(2,128	)
Pooled trust preferred			0				0				558				(242	)			558				(242	)
Pooled SBA			9,501				(139	)			0				0				9,501				(139	)
Other securities			0				0				0				0				0				0

		$	131,126			$	(1,464	)		$	13,154			$	(2,380	)		$	144,280			$	(3,844	)

December 31, 2012


		Less than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Loss				Fair Value				Unrealized Loss				Fair Value				Unrealized Loss
U.S. Treasury		$	0			$	0			$	0			$	0			$	0			$	0
U.S. Gov’t sponsored entities			41,715				(161	)			0				0				41,715				(161	)
State & political subdivisions			7,857				(57	)			0				0				7,857				(57	)
Residential & multi-family mortgage			32,159				(688	)			4,254				(14	)			36,413				(702	)
Commercial mortgage			0				0				0				0				0				0
Corporate notes & bonds			0				0				13,002				(2,370	)			13,002				(2,370	)
Pooled trust preferred			0				0				600				(200	)			600				(200	)
Pooled SBA			3,521				(17	)			0				0				3,521				(17	)
Other securities			0				0				0				0				0				0

		$	85,252			$	(923	)		$	17,856			$	(2,584	)		$	103,108			$	(3,507	)

The Corporation evaluates securities for other-than-temporary impairment on a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

At March 31, 2013, the Corporation held one structured pooled trust preferred security with an adjusted amortized cost of $800 and a fair value of $558. The Corporation evaluated this security for other-than-temporary impairment by estimating the cash flows expected to be received, taking into account future estimated levels of deferrals and defaults by the underlying issuers, and discounting those cash flows at the appropriate accounting yield. For the three months ended March 31, 2013, and March 31, 2012, no other-than-temporary impairment was required to be realized in earnings. At March 31, 2013 and December 31, 2012, the Corporation held four structured pooled trust preferred securities with an adjusted amortized cost of zero.

A roll-forward of the other-than-temporary impairment amount related to credit losses for the three months ended March 31, 2013 and 2012 is as follows:


Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, beginning of period		$	4,054
Additional credit loss for which other-than-temporary impairment was not previously recognized			0
Additional credit loss for which other-than-temporary impairment was previously recognized			0

Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, end of period		$	4,054

Due to the insignificance of the adjusted amortized cost balance, no further disclosures are required with respect to the Corporation’s structured pooled trust preferred securities.

For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management also monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. When reviewing this information, management considers the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred. Management also considers the length of time and extent to which fair value has been less than cost, and management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

As of March 31, 2013 and December 31, 2012, management concluded that the securities described in the previous paragraph were not other-than-temporarily impaired for the following reasons:

•

There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.

•

All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.

The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis.

Information pertaining to security sales is as follows:


		Proceeds				Gross Gains				Gross Losses
Three months ended March 31, 2013		$	1,324			$	76			$	0
Three months ended March 31, 2012			42,149				636				(72	)

The following is a schedule of the contractual maturity of securities available for sale, excluding equity securities, at March 31, 2013:


		Amortized
		Cost				Fair Value
1 year or less		$	35,468			$	35,749
1 year – 5 years			121,517				124,627
5 years – 10 years			176,162				185,331
After 10 years			48,700				49,136

			381,847				394,843
Residential and multi-family mortgage			289,153				296,305
Pooled SBA			65,069				67,001
Commercial mortgage			1,267				1,264

Total debt securities		$	737,336			$	759,413

Mortgage and asset backed securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.

On March 31, 2013 and December 31, 2012, securities carried at $263,391 and $264,813, respectively, were pledged to secure public deposits and for other purposes as provided by law.

- Definition

Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets.

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