Investment Securities

9 Months Ended

Sep. 30, 2012

(2)	Investment Securities

Investment securities available for sale at September 30, 2012 and December 31, 2011 are as follows:

(Dollars in thousands)
	September 30, 2012
	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
Mortgage-backed securities	$	158,548	1,982	444	160,086
U.S. Government
sponsored enterprises		1,254	40	-	1,294
State and political subdivisions		109,456	6,739	46	116,149
Corporate bonds		1,535	16	-	1,551
Trust preferred securities		1,250	-	-	1,250
Equity securities		748	707	-	1,455
Total	$	272,791	9,484	490	281,785

(Dollars in thousands)
	December 31, 2011
	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
Mortgage-backed securities	$	213,378	1,371	1,056	213,693
U.S. Government
sponsored enterprises		7,429	265	-	7,694
State and political subdivisions		92,996	4,157	56	97,097
Corporate bonds		546	-	3	543
Trust preferred securities		1,250	-	-	1,250
Equity securities		748	363	-	1,111
Total	$	316,347	6,156	1,115	321,388

The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2012 and December 31, 2011 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, 2012
	Less than 12 Months			12 Months or More		Total
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Mortgage-backed securities	$	38,125	379	5,750	65	43,875	444
State and political subdivisions		4,406	46	-	-	4,406	46
Total	$	42,531	425	5,750	65	48,281	490

(Dollars in thousands)
	December 31, 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	$	95,122	991	4,125	65	99,247	1,056
State and political subdivisions		4,444	56	-	-	4,444	56
Corporate bonds		542	3	-	-	542	3
Total	$	100,108	1,050	4,125	65	104,233	1,115

At September 30, 2012, unrealized losses in the investment securities portfolio relating to debt securities totaled $490,000. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2012 tables above, seven out of 143 securities issued by state and political subdivisions contained unrealized losses and 21 out of 86 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 amortized cost and estimated fair value of investment securities available for sale at September 30, 2012, 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	$	3,611	3,653
Due from one to five years		12,117	12,581
Due from five to ten years		84,014	89,146
Due after ten years		13,753	14,864
Mortgage-backed securities		158,548	160,086
Equity securities		748	1,455
Total	$	272,791	281,785

Proceeds from sales of securities available for sale during the nine months ended September 30, 2012 were $47.0 million and resulted in gross gains of $1.3 million and gross losses of $103,000. Proceeds from sales of securities available for sale during the 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.

Securities with a fair value of approximately $88.8 million and $83.6 million at September 30, 2012 and December 31, 2011, respectively, were pledged to secure public deposits and for other purposes as required by law.

- Definition

Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets.

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