(2) Investment Securities

Investment securities available for sale at September 30, 2011 and December 31, 2010 are as follows:

(Dollars in thousands)
	September 30, 2011
	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value

Mortgage-backed securities	$	198,755	2,422	350	200,827
U.S. Government
sponsored enterprises		24,715	886	-	25,601
State and political subdivisions		92,971	4,219	35	97,155
Trust preferred securities		1,250	-	-	1,250
Equity securities		893	186	182	897

Total	$	318,584	7,713	567	325,730

(Dollars in thousands)
	December 31, 2010
	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value

Mortgage-backed securities	$	137,811	2,119	569	139,361
U.S. Government
sponsored enterprises		42,933	393	686	42,640
State and political subdivisions		89,486	793	2,450	87,829
Trust preferred securities		1,250	-	-	1,250
Equity securities		982	387	-	1,369

Total	$	272,462	3,692	3,705	272,449

The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2011 and December 31, 2010 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

(Dollars in thousands)
	September 30, 2011
	Less than 12 Months			12 Months or More		Total
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses

Mortgage-backed securities	$	49,699	325	1,060	25	50,759	350
State and political subdivisions		4,736	34	1,027	1	5,763	35
Equity securities		-	-	226	182	226	182

Total	$	54,435	359	2,313	208	56,748	567

(Dollars in thousands)
	December 31, 2010
	Less than 12 Months			12 Months or More		Total
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses

Mortgage-backed securities	$	59,471	569	-	-	59,471	569
U.S. Government
sponsored enterprises		24,123	686	-	-	24,123	686
State and political subdivisions		56,374	2,450	-	-	56,374	2,450

Total	$	139,968	3,705	-	-	139,968	3,705

At September 30, 2011, unrealized losses in the investment securities portfolio relating to debt securities totaled $385,000. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2011 tables above, 6 out of 168 securities issued by state and political subdivisions contained unrealized losses and 25 out of 112 securities issued by U.S. government sponsored enterprises, including mortgage-backed securities, contained unrealized losses. These unrealized losses are considered temporary because of acceptable investment grades on each security and the repayment sources of principal and interest are government backed. The unrealized loss on one equity security was $182,000 as of September 30, 2011. This unrealized loss is considered temporary based upon the entity's strong capital position and growth potential.

The amortized cost and estimated fair value of investment securities available for sale at September 30, 2011, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)
	Amortized Cost		Estimated Fair Value
Due within one year	$	4,651	4,722
Due from one to five years		29,678	30,716
Due from five to ten years		71,327	74,437
Due after ten years		13,280	14,131
Mortgage-backed securities		198,755	200,827
Equity securities		893	897
Total	$	318,584	325,730

Proceeds from sales of securities available for sale during nine months ended September 30, 2011 were $72.3 million and resulted in gross gains of $2.5 million and gross losses of $9,000. Proceeds from sales of securities available for sale during the nine months ended September 30, 2010 were $28.1 million and resulted in a gross gain of $1.8 million.

Securities with a fair value of approximately $88.1million and $75.5 million at September 30, 2011 and December 31, 2010, respectively, were pledged to secure public deposits and for other purposes as required by law.