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2. Investment Securities

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities

(2)	Investment Securities

Investment securities available for sale at June 30, 2014 and December 31, 2013 are as follows:

(Dollars in thousands)
	June 30, 2014
	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Mortgage-backed securities	$	115,747		1,937		170		117,514
U.S. Government
sponsored enterprises		25,211		107		217		25,101
State and political subdivisions		145,573		4,398		1,342		148,629
Corporate bonds		3,495		14		22		3,487
Trust preferred securities		750		-		-		750
Equity securities		748		936		-		1,684
Total	$	291,524		7,392		1,751		297,165

(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 June 30, 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)
	June 30, 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	$	8,550		6		18,386		164		26,936		170
U.S. Government
sponsored enterprises		16,483		217		-		-		16,483		217
State and political subdivisions		12,495		40		38,905		1,302		51,400		1,342
Corporate bonds		1,000		-		533		22		1,533		22
Total	$	38,528		263		57,824		1,488		96,352		1,751

(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 June 30, 2014, unrealized losses in the investment securities portfolio relating to debt securities totaled $1.8 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the June 30, 2014 tables above, 50 out of 175 securities issued by state and political subdivisions contained unrealized losses, 17 out of 95 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 June 30, 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.

June 30, 2014
(Dollars in thousands)
	Amortized Cost			Estimated Fair Value
Due within one year	$	4,392		4,401
Due from one to five years		37,594		38,956
Due from five to ten years		114,940		116,246
Due after ten years		18,103		18,364
Mortgage-backed securities		115,747		117,514
Equity securities		748		1,684
Total	$	291,524		297,165

Proceeds from sales of securities available for sale during the six months ended June 30, 2014 were $677,000 and resulted in gross gains of $26,000. 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.

Securities with a fair value of approximately $83.9 million and $86.0 million at June 30, 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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