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2. Investment Securities

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

Investment securities available for sale at March 31, 2014 and December 31, 2013 are as follows:

(Dollars in thousands)
	March 31, 2014
	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Mortgage-backed securities	$	121,262		1,208		516		121,954
U.S. Government
sponsored enterprises		25,698		92		173		25,617
State and political subdivisions		146,374		3,231		2,731		146,874
Corporate bonds		3,509		12		39		3,482
Trust preferred securities		1,250		-		-		1,250
Equity securities		748		831		-		1,579
Total	$	298,841		5,374		3,459		300,756

(Dollars in thousands)
	December 31, 2013
	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Mortgage-backed securities	$	123,706		1,040		769		123,977
U.S. Government
sponsored enterprises		22,115		97		69		22,143
State and political subdivisions		148,468		1,987		5,087		145,368
Corporate bonds		3,522		11		70		3,463
Trust preferred securities		1,250		-		-		1,250
Equity securities		748		941		-		1,689
Total	$	299,809		4,076		5,995		297,890

The current fair value and associated unrealized losses on investments in securities with unrealized losses at March 31, 2014 and December 31, 2013 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

(Dollars in thousands)
	March 31, 2014
	Less than 12 Months					12 Months or More				Total
	Fair Value			Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-backed securities	$	37,706		495		7,749		21		45,455		516
U.S. Government
sponsored enterprises		13,898		173		-		-		13,898		173
State and political subdivisions		49,309		1,620		17,448		1,111		66,757		2,731
Corporate bonds		996		4		525		35		1,521		39
Total	$	101,909		2,292		25,722		1,167		127,631		3,459

(Dollars in thousands)
	December 31, 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		40,857		691		10,128		78		50,985		769
U.S. Government
sponsored enterprises		9,714		69		-		-		9,714		69
State and political subdivisions		77,187		4,863		1,824		224		79,011		5,087
Corporate bonds		1,984		16		511		54		2,495		70
Total	$	129,742		5,639		12,463		356		142,205		5,995

At March 31, 2014, unrealized losses in the investment securities portfolio relating to debt securities totaled $3.5 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the March 31, 2014 tables above, 65 out of 176 securities issued by state and political subdivisions contained unrealized losses, 24 out of 96 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 financial condition and results of operations 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 March 31, 2014, 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.

March 31, 2014
(Dollars in thousands)
	Amortized Cost			Estimated Fair Value
Due within one year	$	2,069		2,080
Due from one to five years		30,261		31,010
Due from five to ten years		122,174		121,717
Due after ten years		22,327		22,416
Mortgage-backed securities		121,262		121,954
Equity securities		748		1,579
Total	$	298,841		300,756

Proceeds from sales of securities available for sale during the three months ended March 31, 2014 were $677,000 and resulted in gross gains of $26,000. Proceeds from sales of securities available for sale during the three months ended March 31, 2013 were $5.8 million and resulted in gross gains of $263,000.

Securities with a fair value of approximately $88.2 million and $86.0 million at March 31, 2014 and December 31, 2013, 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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