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2. Investment Securities
 6 Months Ended
Jun. 30, 2013
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

Investment securities available for sale at June 30, 2013 and December 31, 2012 are as follows:

 

(Dollars in thousands)              
  June 30, 2013
 

Amortized

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized Losses

  

Estimated Fair

Value

Mortgage-backed securities $ 120,413   937   573   120,777
U.S. Government                
sponsored enterprises   19,251   318   -     19,569
State and political subdivisions   147,160   2,637   3,333   146,464
Corporate bonds   3,548   20   78   3,490
Trust preferred securities   1,250   -     -     1,250
Equity securities   748   853   -     1,601
Total $ 292,370   4,765   3,984   293,151

  

(Dollars in thousands)              
  December 31, 2012
 

Amortized

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized Losses

  

Estimated Fair

Value

Mortgage-backed securities $ 146,755   1,875   606   148,024
U.S. Government                
sponsored enterprises   18,714   203   80   18,837
State and political subdivisions   118,591   7,171   104   125,658
Corporate bonds   2,571   19   4   2,586
Trust preferred securities   1,250   -     -     1,250
Equity securities   748   720   -     1,468
Total $ 288,629   9,988   794   297,823

 

The current fair value and associated unrealized losses on investments in securities with unrealized losses at June 30, 2013 and December 31, 2012 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

 

(Dollars in thousands)                      
  June 30, 2013
  Less than 12 Months   12 Months or More   Total
  Fair Value   Unrealized Losses   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses
Mortgage-backed securities $ 48,281   503   5,298   70   53,579   573
State and political subdivisions   56,713   3,333   -     -     56,713   3,333
Corporate bonds   1,497   78   -     -     1,497   78
Total $ 106,491   3,914   5,298   70   111,789   3,984

 

(Dollars in thousands)                      
  December 31, 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 $ 48,126   468   12,913   138   61,039   606
U.S. Government                        
sponsored enterprises   3,402   80   -     -     3,402   80
State and political subdivisions   9,490   104   -     -     9,490   104
Corporate bonds   1,035   4   -     -     1,035   4
Total $ 62,053   656   12,913   138   74,966   794

 

At June 30, 2013, unrealized losses in the investment securities portfolio relating to debt securities totaled $4.0 million.  The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary.  From the June 30, 2013 tables above, 57 out of 178 securities issued by state and political subdivisions contained unrealized losses, 27 out of 88 securities issued by U.S. Government sponsored enterprises, including mortgage-backed securities contained unrealized losses, and two out of five securities issued by corporations 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 on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed.

 

The amortized cost and estimated fair value of investment securities available for sale at June 30, 2013, 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 $ 3,975   4,027
Due from one to five years   24,701   25,097
Due from five to ten years   111,255   110,215
Due after ten years   31,278   31,434
Mortgage-backed securities   120,413   120,777
Equity securities   748   1,601
Total $ 292,370   293,151

 

Proceeds from sales of securities available for sale during the six months ended June 30, 2013 were $17.5 million and resulted in gross gains of $738,000 and gross losses of $124,000.  Proceeds from sales of securities available for sale during the six months ended June 30, 2012 were $34.8 million and resulted in gross gains of $1.2 million.

 

Securities with a fair value of approximately $78.4 million and $73.9 million at June 30, 2013 and December 31, 2012, respectively, were pledged to secure public deposits and for other purposes as required by law.