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Investment Securities | 9 Months Ended
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Sep. 30, 2011
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Note 2 – Investment Securities The following table summarizes the amortized cost and estimated fair value of investment securities at September 30, 2011:
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair Value |
|  | Cost |  |  | Gains |  |  | Losses |  |  | (Estimated) |
Securities available for sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and agency |  | $ | 15,295,000 |  |  | $ | 1,199,000 |  |  | $ | - |  |  | $ | 16,494,000 |
Mortgage-backed securities |  |  | 227,180,000 |  |  |  | 8,173,000 |  |  |  | (315,000 | ) |  |  | 235,038,000 |
State and political subdivisions |  |  | 70,124,000 |  |  |  | 3,936,000 |  |  |  | (21,000 | ) |  |  | 74,039,000 |
Corporate securities |  |  | 1,103,000 |  |  |  | - |  |  |  | (324,000 | ) |  |  | 779,000 |
Other equity securities |  |  | 534,000 |  |  |  | 33,000 |  |  |  | (135,000 | ) |  |  | 432,000 |
|  | $ | 314,236,000 |  |  | $ | 13,341,000 |  |  | $ | (795,000 | ) |  | $ | 326,782,000 |
Securities to be held to maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and agency |  | $ | 20,998,000 |  |  | $ | 180,000 |  |  | $ | - |  |  | $ | 21,178,000 |
Mortgage-backed securities |  |  | 61,048,000 |  |  |  | 4,221,000 |  |  |  | (19,000 | ) |  |  | 65,250,000 |
State and political subdivisions |  |  | 47,353,000 |  |  |  | 3,397,000 |  |  |  | (251,000 | ) |  |  | 50,499,000 |
Corporate securities |  |  | 300,000 |  |  |  | - |  |  |  | - |  |  |  | 300,000 |
|  | $ | 129,699,000 |  |  | $ | 7,798,000 |  |  | $ | (270,000 | ) |  | $ | 137,227,000 |
Non-marketable securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal Home Loan Bank Stock |  | $ | 14,031,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 14,031,000 |
Federal Reserve Bank Stock |  |  | 1,412,000 |  |  |  | - |  |  |  | - |  |  |  | 1,412,000 |
|  | $ | 15,443,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 15,443,000 |
The following table summarizes the amortized cost and estimated fair value at December 31, 2010:
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair Value |
|  | Cost |  |  | Gains |  |  | Losses |  |  | (Estimated) |
Securities available for sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and agency |  | $ | 15,380,000 |  |  | $ | 665,000 |  |  | $ | - |  |  | $ | 16,045,000 |
Mortgage-backed securities |  |  | 236,126,000 |  |  |  | 1,024,000 |  |  |  | (2,736,000 | ) |  |  | 234,414,000 |
State and political subdivisions |  |  | 43,404,000 |  |  |  | 171,000 |  |  |  | (2,051,000 | ) |  |  | 41,524,000 |
Corporate securities |  |  | 1,113,000 |  |  |  | - |  |  |  | (247,000 | ) |  |  | 866,000 |
Other equity securities |  |  | 371,000 |  |  |  | 19,000 |  |  |  | (10,000 | ) |  |  | 380,000 |
|  | $ | 296,394,000 |  |  | $ | 1,879,000 |  |  | $ | (5,044,000 | ) |  | $ | 293,229,000 |
Securities to be held to maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and agency |  | $ | 2,190,000 |  |  | $ | 35,000 |  |  | $ | - |  |  | $ | 2,225,000 |
Mortgage-backed securities |  |  | 55,710,000 |  |  |  | 2,656,000 |  |  |  | (144,000 | ) |  |  | 58,222,000 |
State and political subdivisions |  |  | 49,330,000 |  |  |  | 1,102,000 |  |  |  | (663,000 | ) |  |  | 49,769,000 |
Corporate securities |  |  | 150,000 |  |  |  | - |  |  |  | - |  |  |  | 150,000 |
|  | $ | 107,380,000 |  |  | $ | 3,793,000 |  |  | $ | (807,000 | ) |  | $ | 110,366,000 |
Non-marketable securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal Home Loan Bank Stock |  | $ | 14,031,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 14,031,000 |
Federal Reserve Bank Stock |  |  | 1,412,000 |  |  |  | - |  |  |  | - |  |  |  | 1,412,000 |
|  | $ | 15,443,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 15,443,000 |
The following table summarizes the contractual maturities of investment securities at September 30, 2011:
|  | Securities available for sale |  |  | Securities to be held to maturity |
|  | Amortized Cost |  |  | Fair Value (Estimated) |  |  | Amortized Cost |  |  | Fair Value (Estimated) |
Due in 1 year or less |  | $ | 4,394,000 |  |  | $ | 4,450,000 |  |  | $ | 152,000 |  |  | $ | 153,000 |
Due in 1 to 5 years |  |  | 11,188,000 |  |  |  | 11,748,000 |  |  |  | 14,848,000 |  |  |  | 15,415,000 |
Due in 5 to 10 years |  |  | 34,872,000 |  |  |  | 36,698,000 |  |  |  | 22,158,000 |  |  |  | 23,608,000 |
Due after 10 years |  |  | 263,248,000 |  |  |  | 273,454,000 |  |  |  | 92,541,000 |  |  |  | 98,051,000 |
Equity securities |  |  | 534,000 |  |  |  | 432,000 |  |  |  | - |  |  |  | - |
|  | $ | 314,236,000 |  |  | $ | 326,782,000 |  |  | $ | 129,699,000 |  |  | $ | 137,227,000 |
The following table summarizes the contractual maturities of investment securities at December 31, 2010:
|  | Securities available for sale |  |  | Securities to be held to maturity |
|  | Amortized Cost |  |  | Fair Value (Estimated) |  |  | Amortized Cost |  |  | Fair Value (Estimated) |
Due in 1 year or less |  | $ | - |  |  | $ | - |  |  | $ | 1,195,000 |  |  | $ | 1,203,000 |
Due in 1 to 5 years |  |  | 2,950,000 |  |  |  | 3,099,000 |  |  |  | 5,475,000 |  |  |  | 5,749,000 |
Due in 5 to 10 years |  |  | 2,385,000 |  |  |  | 2,404,000 |  |  |  | 13,838,000 |  |  |  | 14,435,000 |
Due after 10 years |  |  | 290,688,000 |  |  |  | 287,346,000 |  |  |  | 86,872,000 |  |  |  | 88,979,000 |
Equity securities |  |  | 371,000 |  |  |  | 380,000 |  |  |  | - |  |  |  | - |
|  | $ | 296,394,000 |  |  | $ | 293,229,000 |  |  | $ | 107,380,000 |  |  | $ | 110,366,000 |
At September 30, 2011, securities with a fair value of $171.4 million were pledged to secure public deposits, repurchase agreements, and for other purposes as required by law. This compares to securities with a fair value of $113.0 million as of December 31, 2010 pledged for the same purposes. Gains and losses on the sale of securities available for sale are computed by subtracting the amortized cost at the time of sale from the security’s selling price, net of accrued interest to be received. The following table shows securities gains and losses for the nine months ended September 30, 2011 and 2010:
|  | For the nine months ended September 30, 2011 |  |  | For the nine months ended September 30, 2010 |
Proceeds from sales |  | $ | 75,182,000 |  |  | $ | 202,000 |
Gross gains |  | $ | 964,000 |  |  | $ | 2,000 |
Gross losses |  |  | (727,000 | ) |  |  | - |
Net gain |  | $ | 237,000 |  |  | $ | 2,000 |
Related income taxes |  | $ | 83,000 |  |  | $ | 1,000 |
Management reviews securities with unrealized losses for other than temporary impairment. As of September 30, 2011, there were 29 securities with unrealized losses held in the Company’s portfolio. These securities were temporarily impaired as a result of changes in interest rates reducing their fair market value, of which 12 had been temporarily impaired for 12 months or more. At the present time, there have been no material changes in the credit quality of these securities resulting in other than temporary impairment, and in Management’s opinion, no additional write-down for other-than-temporary impairment is warranted. Information regarding securities temporarily impaired as of September 30, 2011 is summarized below:
|  | Less than 12 months |  |  | 12 months or more |  |  | Total |
|  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
|  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
U.S. Treasury and agency |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Mortgage-backed securities |  |  | 11,669,000 |  |  |  | (46,000 | ) |  |  | 6,984,000 |  |  |  | (288,000 | ) |  |  | 18,653,000 |  |  |  | (334,000 | )
State and political subdivisions |  |  | 1,748,000 |  |  |  | (21,000 | ) |  |  | 1,569,000 |  |  |  | (251,000 | ) |  |  | 3,317,000 |  |  |  | (272,000 | )
Corporate securities |  |  | - |  |  |  | - |  |  |  | 779,000 |  |  |  | (324,000 | ) |  |  | 779,000 |  |  |  | (324,000 | )
Other equity securities |  |  | 151,000 |  |  |  | (119,000 | ) |  |  | 36,000 |  |  |  | (16,000 | ) |  |  | 187,000 |  |  |  | (135,000 | )
|  | $ | 13,568,000 |  |  | $ | (186,000 | ) |  | $ | 9,368,000 |  |  | $ | (879,000 | ) |  | $ | 22,936,000 |  |  | $ | (1,065,000 | )
As of December 31, 2010, there were 136 securities with unrealized losses held in the Company’s portfolio. These securities were temporarily impaired as a result of changes in interest rates reducing their fair value, of which 13 had been temporarily impaired for 12 months or more. At the present time, there have been no material changes in the credit quality of these securities resulting in other than temporary impairment, and in Management’s opinion, no additional write-down for other-than-temporary impairment is warranted. Information regarding securities temporarily impaired as of December 31, 2010 is summarized below:
|  | Less than 12 months |  |  | 12 months or more |  |  | Total |
|  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
|  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
U.S. Treasury and agency |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Mortgage-backed securities |  |  | 160,767,000 |  |  |  | (2,654,000 | ) |  |  | 5,348,000 |  |  |  | (226,000 | ) |  |  | 166,115,000 |  |  |  | (2,880,000 | )
State and political subdivisions |  |  | 44,513,000 |  |  |  | (2,307,000 | ) |  |  | 1,355,000 |  |  |  | (407,000 | ) |  |  | 45,868,000 |  |  |  | (2,714,000 | )
Corporate securities |  |  | - |  |  |  | - |  |  |  | 866,000 |  |  |  | (247,000 | ) |  |  | 866,000 |  |  |  | (247,000 | )
Other equity securities |  |  | - |  |  |  | - |  |  |  | 56,000 |  |  |  | (10,000 | ) |  |  | 56,000 |  |  |  | (10,000 | )
|  | $ | 205,280,000 |  |  | $ | (4,961,000 | ) |  | $ | 7,625,000 |  |  | $ | (890,000 | ) |  | $ | 212,905,000 |  |  | $ | (5,851,000 | )
The Bank is a member of the Federal Home Loan Bank (“FHLB”) of Boston. The FHLB is a cooperatively owned wholesale bank for housing and finance in the six New England States. Its mission is to support the residential mortgage and community-development lending activities of its members, which include over 450 financial institutions across New England. As a requirement of membership in the FHLB, the Bank must own a minimum required amount of FHLB stock, calculated periodically based primarily on its level of borrowings from the FHLB. The Bank uses the FHLB for much of its wholesale funding needs. As of September 30, 2011 and December 31, 2010, the Bank’s investment in FHLB stock totaled $14.0 million. FHLB stock is a non-marketable equity security and therefore is reported at cost, which equals par value. Shares held in excess of the minimum required amount are generally redeemable at par value. However, in the first quarter of 2009 the FHLB announced a moratorium on such redemptions in order to preserve its capital in response to current market conditions and declining retained earnings. The minimum required shares are redeemable, subject to certain limitations, five years following termination of FHLB membership. The Bank has no intention of terminating its FHLB membership. In each of the first, second and third quarters of 2011, FHLB’s board of directors declared a dividend equal to an annual yield of 0.30%. FHLB’s board of directors anticipates that it will continue to declare modest cash dividends through 2011, but cautioned that adverse events such as a negative trend in credit losses on the FHLB’s private-label mortgage-backed securities or mortgage portfolio, a meaningful decline in income, or regulatory disapproval could lead to reconsideration of this plan. The Company periodically evaluates its investment in FHLB stock for impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. No impairment losses have been recorded through September 30, 2011. The Bank will continue to monitor its investment in FHLB stock.

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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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