Note 10 – Investments

Although the Company currently has the intent and the ability to hold the securities in its investment portfolio to maturity, the securities are all marketable and are classified as “available for sale” to allow maximum flexibility with regard to interest rate risk and liquidity management. Pursuant to FASB’s guidance on accounting for debt and equity securities, available for sale securities are carried on the Company’s financial statements at their estimated fair market values, with monthly tax-effected “mark-to-market” adjustments made vis-à-vis accumulated other comprehensive income in shareholders’ equity. The Company’s available-for-sale investment securities totaled $399 million at March 31, 2013, and $380 million at December 31, 2012.

Amortized Cost And Estimated Fair Value

The amortized cost and estimated fair value of investment securities available-for-sale are as follows

(dollars in thousands, unaudited):

	March 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

U.S. Government agencies	$	4,698	$	4	$	(18)	$	4,684
Obligations of state and political subdivisions		78,445		3,241		(489)		81,197
U.S. Government agencies collateralized by
mortgage obligations		308,044		3,779		(1,051)		310,772
Equity Securities		1,336		766		-		2,102
	$	392,523	$	7,790	$	(1,558)	$	398,755

	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

U.S. Government agencies	$	2,987	$	3	$	(17)	$	2,973
Obligations of state and political subdivisions		70,736		3,430		(180)		73,986
U.S. Government agencies collateralized by
mortgage obligations		298,806		3,547		(964)		301,389
Equity Securities		1,336		508		(4)		1,840
	$	373,865	$	7,488	$	(1,165)	$	380,188

At March 31, 2013 and December 31, 2012, the Company had 130 securities and 89 securities, respectively, with unrealized losses. Management has evaluated those securities as of the respective dates, and does not believe that any of the associated unrealized losses are other than temporary. Information pertaining to our investment securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is disclosed in the table below.

Investment Portfolio - Unrealized Losses

(dollars in thousands, unaudited)

	March 31, 2013
	Less than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value

US Government Agencies	$	(18)	$	1,993	$	-	$	-
Obligations of State and Political Subdivisions		(475)		22,550		(15)		318
U.S. Government agencies collateralized by mortgage
obligations		(919)		112,437		(132)		11,942
Other Securities		-		-		-		-
Total	$	(1,412)	$	136,980	$	(147)	$	12,260

	December 31, 2012
	Less than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value

US Government Agencies	$	(17)	$	1,996	$	-	$	-
Obligations of State and Political Subdivisions		(180)		9,324		-		-
U.S. Government agencies collateralized by mortgage
obligations		(903)		106,799		(61)		6,965
Other Securities		(4)		242		-		-
Total	$	(1,104)	$	118,361	$	(61)	$	6,965