(4) Investment Securities

The amortized cost and fair value of debt securities classified as available-for-sale at September 30, 2013 and December 31, 2012 are as follows:

			Gross		Gross
	Amortized		unrealized		unrealized
(in thousands)	cost		gains		losses		Fair value
September 30, 2013
U.S. Treasury	$	1,000	$	6	$	0	$	1,006
Government sponsored enterprises	64,089		423		674		63,838
Asset-backed securities	114,966		1,402		2,289		114,079
Obligations of states and political subdivisions	34,299		627		220		34,706
Total available for sale securities	$	214,354	$	2,458	$	3,183	$	213,629

December 31, 2012
U.S. Treasury	$	2,000	$	30	$	0	$	2,030
Government sponsored enterprises	54,327		853		0		55,180
Asset-backed securities	104,607		3,276		11		107,872
Obligations of states and political subdivisions	33,959		1,222		17		35,164
Total available for sale securities	$	194,893	$	5,381	$	28	$	200,246

All of the Company’s investment securities are classified as available for sale. Agency bonds and notes, agency mortgage-backed securities and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, and the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB), which are U.S. government-sponsored enterprises.

Investment securities that are classified as restricted equity securities primarily consist of Federal Home Loan Bank stock and the Company’s interest in statutory trusts. These securities are reported at cost in other assets in the amount of $4.0 million and $3.9 million as of September 30, 2013 and December 31, 2012, respectively.

Debt securities with carrying values aggregating approximately $154.5 million and $146.4 million at September 30, 2013 and December 31, 2012, respectively, were pledged to secure public funds, securities sold under agreements to repurchase, and for other purposes as required or permitted by law.

The amortized cost and fair value of debt securities classified as available-for-sale at September 30, 2013 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties.

	Amortized		Fair
(in thousands)	cost		value
Due in one year or less	$	6,432	$	6,482
Due after one year through five years	59,976		60,495
Due after five years through ten years	31,843		31,488
Due after ten years	1,137		1,085
Total	99,388		99,550
Asset-backed securities	114,966		114,079
Total available for sale securities	$	214,354	$	213,629

Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2013 and December 31, 2012 were as follows:

	Less than 12 months					12 months or more					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(in thousands)	Value		Losses			Value		Losses			Value		Losses
At September 30, 2013
Government sponsored enterprises	$	27,876	$	(674	)	$	0	$	0		$	27,876	$	(674	)
Asset-backed securities	68,464		(2,281		)	790		(8		)	69,254		(2,289		)
Obligations of states and political subdivisions	9,636		(220		)	0		0			9,636		(220		)
Total	$	105,976	$	(3,175	)	$	790	$	(8	)	$	106,766	$	(3,183	)

(in thousands)
At December 31, 2012
Government sponsored enterprises	$	1,044	$	0		$	0	$	0	$	1,044	$	0
Asset-backed securities	4,729		(11		)	0		0		4,729		(11		)
Obligations of states and political subdivisions	2,114		(17		)	150		0		2,264		(17		)
Total	$	7,887	$	(28	)	$	150	$	0	$	8,037	$	(28	)

The total available for sale portfolio consisted of approximately 350 securities at September 30, 2013. The portfolio included 100 securities having an aggregate fair value of $106.8 million that were in a loss position at September 30, 2013. Securities identified as temporarily impaired which have been in a loss position for 12 months or longer totaled $790,000 at fair value. The $3.2 million aggregate unrealized loss included in accumulated other comprehensive income (loss) at September 30, 2013 was caused by interest rate fluctuations. The total available for sale portfolio consisted of approximately 380 securities at December 31, 2012. The portfolio included 14 securities having an aggregate fair value of $8.0 million that were in a loss position at December 31, 2012. Securities identified as temporarily impaired which have been in a loss position for 12 months or longer totaled $150,000 at fair value. The $28,000 aggregate unrealized loss included in other comprehensive income at December 31, 2012 was caused by interest rate fluctuations. Because the decline in fair value is attributable to changes in interest rates and not credit quality these investments were not considered other-than-temporarily impaired at September 30, 2013 and December 31, 2012, respectively.

The following table presents the components of investment securities gains and losses which have been recognized in earnings.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2013		2012		2013		2012
Gross gains realized on sales	$	0	$	26	$	554	$	26
Gross losses realized on sales	0		0		0		0
Other-than-temporary impairment recognized	0		0		0		0
Net realized gains	$	0	$	26	$	554	$	26