Note 2. Securities

The Company invests in U.S. agency and mortgage-backed securities, obligations of states and political subdivisions, corporate equity securities and restricted securities. Restricted securities include required equity investments in certain correspondent banks which have no readily determinable market value. Amortized costs and fair values of securities available for sale at December 31, 2011 and 2010, were as follows:


	2011
	(in thousands)
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. agency and mortgage-backed securities	$	76,549	$	2,343	$	(16	)	$	78,876
Obligations of states and political subdivisions		11,895		781		—			12,676
Corporate equity securities		26		87		—			113

	$	88,470	$	3,211	$	(16	)	$	91,665


	2010
	(in thousands)
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. agency and mortgage-backed securities	$	45,627	$	1,508	$	(211	)	$	46,924
Obligations of states and political subdivisions		13,290		225		(214	)		13,301
Corporate equity securities		23		172		—			195

	$	58,940	$	1,905	$	(425	)	$	60,420

At December 31, 2011 and 2010, investments in an unrealized loss position that are temporarily impaired were as follows:

		$0,000,000		$0,000,000			$0,000,000		$0,000,000		$0,000,000		$0,000,000
	2011
	(in thousands)
	Less than 12 months					12 months or more				Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)
U.S. agency and mortgage-backed securities	$	3,955	$	(16	)	$	—	$	—	$	3,955	$	(16	)
Obligations of states and political subdivisions		—		—			—		—		—		—

	$	3,955	$	(16	)	$	—	$	—	$	3,955	$	(16	)

		$0,000,000		$0,000,000			$0,000,000		$0,000,000			$0,000,000		$0,000,000
	2010
	(in thousands)
	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
U.S. agency and mortgage-backed securities	$	11,286	$	(211	)	$	—	$	—		$	11,286	$	(211	)
Obligations of states and political subdivisions		2,923		(128	)		893		(86	)		3,816		(214	)

	$	14,209	$	(339	)	$	893	$	(86	)	$	15,102	$	(425	)

The tables above provide information about securities that have been in an unrealized loss position for less than twelve consecutive months and securities that have been in an unrealized loss position for twelve consecutive months or more. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Impairment is considered to be other-than temporary if the Company (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its cost, or (3) does not expect to recover the security's entire amortized cost basis. Presently, the Company does not intend to sell any of these securities, will not be required to sell these securities, and expects to recover the entire amortized cost of all the securities.

At December 31, 2011, there were three U.S. agency and mortgage-backed securities in an unrealized loss position. One hundred percent of the Company's investment portfolio is considered investment grade. The weighted-average re-pricing term of the portfolio was 3.3 years at December 31, 2011.

The amortized cost and fair value of securities available for sale at December 31, 2011 by contractual maturity are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties. Corporate equity securities are not included in the maturity categories in the following maturity summary because they do not have a stated maturity date.


	(in thousands)
	Amortized Cost		Fair Value
Due within one year	$	300	$	300
Due after one year through five years		3,619		3,789
Due after five years through ten years		10,790		11,418
Due after ten years		73,735		76,045
Corporate equity securities		26		113

	$	88,470	$	91,665

Proceeds from sales, calls and maturities of securities available for sale during 2011, 2010 and 2009 were $14.9 million, $4.4 million and $6.0 million, respectively. Gross gains of $65 thousand, $13 thousand and $10 thousand were realized on those sales during 2011, 2010 and 2009, respectively. Gross losses of $6 thousand and $20 thousand were realized on those sales during 2011 and 2010, respectively.

Securities having a book value of $25.3 million and $26.5 million at December 31, 2011 and 2010 were pledged to secure other borrowings, public deposits and for other purposes required by law.

The Company's investment in FHLB stock totaled $1.9 million at December 31, 2011. FHLB stock is generally viewed as a long-term investment and as a restricted security, which is carried at cost, because there is a minimal market for the stock. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider this investment to be other-than-temporarily impaired at December 31, 2011, and no impairment has been recognized. FHLB stock is shown in restricted securities on the balance sheet and is not part of the available for sale securities portfolio.