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Investment Securities | 3 Months Ended
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Jun. 30, 2012
Investment Securities: |
Investment Securities | NOTE 6: INVESTMENT SECURITIES
| June 30, 2012
|  |  | Gross |  | Gross |  |  |  | Tax
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Equivalent
| Cost |  | Gains |  | Losses |  | Value |  | Yield
AVAILABLE-FOR-SALE SECURITIES: |  |  |  |  |  |  |  |  |
U.S. government agencies | $30,000 |  | $18 |  | $-- |  | $30,018 |  | 1.25%
Collateralized mortgage obligations | 4,858 |  | 154 |  | 239 |  | 4,773 |  | 5.29
Mortgage-backed securities | 585,327 |  | 14,904 |  | 75 |  | 600,156 |  | 2.75
Small Business Administration |  |  |  |  |  |  |  |  |
loan pools | 53,027 |  | 723 |  | 11 |  | 53,739 |  | 1.83
States and political subdivisions | 120,141 |  | 7,644 |  | -- |  | 127,785 |  | 5.66
Corporate bonds | 49 |  | 245 |  | -- |  | 294 |  | 42.08
Equity securities | 1,230 |  | 1,196 |  | -- |  | 2,426 |  | --
Total Available for Sale Securities | $794,632 |  | $24,884 |  | $325 |  | $819,191 |  | 3.09%
| December 31, 2011
|  |  | Gross |  | Gross |  |  |  | Tax
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Equivalent
| Cost |  | Gains |  | Losses |  | Value |  | Yield
AVAILABLE-FOR-SALE SECURITIES: |  |  |  |  |  |  |  |  |
U.S. government agencies | $20,000 |  | $60 |  | $-- |  | $20,060 |  | 1.12%
Collateralized mortgage obligations | 5,220 |  | -- |  | 380 |  | 4,840 |  | 5.53%
Mortgage-backed securities | 628,729 |  | 13,728 |  | 802 |  | 641,655 |  | 3.12%
Small Business Administration |  |  |  |  |  |  |  |  |
loan pools | 55,422 |  | 1,070 |  | -- |  | 56,492 |  | 1.68%
States and political subdivisions | 145,663 |  | 5,478 |  | 903 |  | 150,238 |  | 5.72%
Corporate bonds | 50 |  | 245 |  | -- |  | 295 |  | 39.65%
Equity securities | 1,230 |  | 601 |  | -- |  | 1,831 |  | --
Total Available for Sale Securities | $856,314 |  | $21,182 |  | $2,085 |  | $875,411 |  | 3.44%%
| June 30, 2012
|  |  | Gross |  | Gross |  |  |  | Tax
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Equivalent
| Cost |  | Gains |  | Losses |  | Value |  | Yield
HELD-TO-MATURITY SECURITIES: |  |  |  |  |  |  |  |  |
States and political subdivisions | $920 |  | $173 |  | $-- |  | $1,093 |  | 7.37%
| December 31, 2011
|  |  | Gross |  | Gross |  |  |  | Tax
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Equivalent
| Cost |  | Gains |  | Losses |  | Value |  | Yield
HELD-TO-MATURITY SECURITIES: |  |  |  |  |  |  |  |  |
States and political subdivisions | $1,865 |  | $236 |  | $-- |  | $2,101 |  | 4.39%
The amortized cost and fair value of available-for-sale securities at June 30, 2012, by contractual maturity, are shown below. 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.
| Amortized |  | Fair
| Cost |  | Value
One year or less | $1,120 |  | $1,120
After one through five years | 975 |  | 993
After five through ten years | 10,556 |  | 10,986
After ten years | 190,566 |  | 198,737
Securities not due on a single maturity date | 590,185 |  | 604,929
Equity securities | 1,230 |  | 2,426
Total Available for Sale Securities by Contractual Maturity | $794,632 |  | $819,191
The held-to-maturity securities at June 30, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Amortized |  | Fair
| Cost |  | Value
After five through ten years | $920 |  | $1,093
Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2012 and December 31, 2011, respectively, was approximately $42.6 million $42,600,000 and $172.6 million $172,600,000, which is approximately 5.2% and 19.7% of the Company’s available-for-sale and held-to-maturity investment portfolio, respectively. Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary at June 30, 2012. During the three and six months ended June 30, 2012, the Company determined that the impairment of a non-agency collateralized mortgage obligation with a book value of $962,000 had become other than temporary$962,000. Consequently, the Company recorded a $262,000 pre-tax charge to income$262,000. During the three and six months ended June 30, 2011, the Company determined that the impairment of a non-agency collateralized mortgage obligation with a book value of $1.8 million$1,800,000 had become other than temporary$1,800,000. Consequently, the Company recorded a $400,000 pre-tax charge to income$400,000. The following table shows the Company’s 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 at June 30, 2012 and December 31, 2011:
| June 30, 2012
| Less than 12 Months |  | 12 Months or More |  | Total
| Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
| Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
Description of Securities |  |  |  |  |  |  |  |  |  |  |
Collateralized mortgage |  |  |  |  |  |  |  |  |  |  |
obligations | $-- |  | $-- |  | $1,124 |  | $(239) |  | $1,124 |  | $(239)
Mortgage-backed securities | 13,973 |  | (29) |  | 17,629 |  | (46) |  | 31,602 |  | (75)
Small Business |  |  |  |  |  |  |  |  |  |  |
Administration loan pools | 9,876 |  | (11) |  | -- |  | -- |  | 9,876 |  | (11)
Total securities by investment category | $23,849 |  | $(40) |  | $18,753 |  | $(285) |  | $42,062 |  | $(325)
| December 31, 2011
| Less than 12 Months |  | 12 Months or More |  | Total
| Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
| Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
Description of Securities |  |  |  |  |  |  |  |  |  |  |
Collateralized mortgage |  |  |  |  |  |  |  |  |  |  |
obligations | $3,760 |  | $(110) |  | $1,460 |  | $(270) |  | $5,220 |  | $(380)
Mortgage-backed securities | 61,720 |  | (365) |  | 91,824 |  | (437) |  | 153,544 |  | (802)
States and political |  |  |  |  |  |  |  |  |  |  |
subdivisions | 6,436 |  | (44) |  | 7,381 |  | (859) |  | 13,817 |  | (903)
Total securities by investment category | $71,916 |  | $(519) |  | $100,665 |  | $(1,566) |  | $172,581 |  | $(2,085)
Gross gains of $2.1 million $2,100,000 and gross losses of $559,000 resulting from sales of available-for-sale securities were realized for the three and six months ended June 30, 2012. No securities were sold during the three and six months ended June 30, 2011, and therefore, no gains or losses on sales were realized. Gains and losses on sales of securities are determined on the specific-identification method. Other-than-temporary Impairment. Upon acquisition of a security, the Company decides whether it is within the scope of the accounting guidance for beneficial interests in securitized financial assets or will be evaluated for impairment under the accounting guidance for investments in debt and equity securities. The accounting guidance for beneficial interests in securitized financial assets provides incremental impairment guidance for a subset of the debt securities within the scope of the guidance for investments in debt and equity securities. For securities where the security is a beneficial interest in securitized financial assets, the Company uses the beneficial interests in securitized financial asset impairment model. For securities where the security is not a beneficial interest in securitized financial assets, the Company uses the debt and equity securities impairment model. The Company does not currently have securities within the scope of this guidance for beneficial interests in securitized financial assets. The Company conducts periodic reviews to identify and evaluate each investment security to determine whether an other-than-temporary impairment has occurred. The Company considers the length of time a security has been in an unrealized loss position, the relative amount of the unrealized loss compared to the carrying value of the security, the type of security and other factors. If certain criteria are met, the Company performs additional review and evaluation using observable market values or various inputs in economic models to determine if an unrealized loss is other-than-temporary. The Company uses quoted market prices for marketable equity securities and uses broker pricing quotes based on observable inputs for equity investments that are not traded on a stock exchange. For non-agency collateralized mortgage obligations, to determine if the unrealized loss is other-than-temporary, the Company projects total estimated defaults of the underlying assets (mortgages) and multiplies that calculated amount by an estimate of realizable value upon sale in the marketplace (severity) in order to determine the projected collateral loss. The Company also evaluates any current credit enhancement underlying these securities to determine the impact on cash flows. If the Company determines that a given security position will be subject to a write-down or loss, the Company records the expected credit loss as a charge to earnings. Credit Losses Recognized on Investments. Certain debt securities have experienced fair value deterioration due to credit losses. The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income.
| Accumulated
| Credit Losses
Credit losses on debt securities held |
April 1, 2012 | $3,598
Additions related to other-than-temporary losses not previously recognized | --
Additions related to increases in credit losses on debt securities for which |
other-than-temporary impairment losses were previously recognized | 262
Reductions due to sales | --
June 30, 2012 | $3,860
Credit losses on debt securities held |
April 1, 2011 | $2,983
Additions related to other-than-temporary losses not previously recognized | --
Additions related to increases in credit losses on debt securities for which |
other-than-temporary impairment losses were previously recognized | 400
Reductions due to sales | --
June 30, 2011 | $3,383
Credit losses on debt securities held |
January 1, 2012 | $3,598
Additions related to other-than-temporary losses not previously recognized | --
Additions related to increases in credit losses on debt securities for which |
other-than-temporary impairment losses were previously recognized | 262
Reductions due to sales | --
June 30, 2012 | $3,860
Credit losses on debt securities held |
January 1, 2011 | $2,983
Additions related to other-than-temporary losses not previously recognized | --
Additions related to increases in credit losses on debt securities for which |
other-than-temporary impairment losses were previously recognized | 400
Reductions due to sales | --
June 30, 2011 | $3,383

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- Definition Tabular disclosure of investments in certain debt and equity securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Equity Security -URI http://asc.fasb.org/extlink&oid=6511694 -Topic 320 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Debt Security -URI http://asc.fasb.org/extlink&oid=6509901 -Topic 320 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 115 -Paragraph 3, 19, 20, 21, 22, 137 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563 + Details
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