At June 30, 2011 and December 31, 2010, respectively, all securities within the scope of FASB ASC 320, Investments – Debt and Equity Securities were classified as available-for-sale. The fair value and amortized cost for securities available-for-sale by contractual maturity at June 30, 2011 and December 31, 2010, respectively, are presented below.

		June 30, 2011
			1 year	1 to 5	5 to 10	After 10	Fair	Gross Unrealized		Amortized
(Dollars in thousands)			or less	years	years	years	Value	Gains	Losses	Cost
Available-for-sale:
Agency obligations (a)		$	—	—	23,899	26,860	50,759	29	424	$	51,154
Agency RMBS (a)			—	—	14,255	146,103	160,358	1,254	532		159,636
State and political subdivisions			20	932	15,389	66,734	83,075	1,737	353		81,691
Trust preferred securities:
	Pooled		—	—	—	20	20	—	210		230
	Individual issuer		—	—	—	2,231	2,231	186	134		2,179
	Total available-for-sale	$	20	932	53,543	241,948	296,443	3,206	1,653	$	294,890
(a) Includes securities issued by U.S. government agencies or government sponsored entities.

		December 31, 2010
			1 year	1 to 5	5 to 10	After 10	Fair	Gross Unrealized		Amortized
(Dollars in thousands)			or less	years	years	years	Value	Gains	Losses	Cost
Available-for-sale:
Agency obligations (a)		$	—	—	37,821	52,650	90,471	95	1,017	$	91,393
Agency RMBS (a)			—	—	9,976	133,168	143,144	1,566	1,441		143,019
State and political subdivisions			21	856	13,547	62,342	76,766	472	2,801		79,095
Trust preferred securities:
	Pooled		—	—	—	20	20	—	210		230
	Individual issuer		—	—	—	2,129	2,129	—	153		2,282
Corporate debt			—	2,690	—	—	2,690	—	—		2,690
	Total available-for-sale	$	21	3,546	61,344	250,309	315,220	2,133	5,622	$	318,709
(a) Includes securities issued by U.S. government agencies or government sponsored entities.

Securities with aggregate fair values of $186.5 million and $171.1 million at June 30, 2011 and December 31, 2010, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase, Federal Home Loan Bank (“FHLB”) advances, and for other purposes required or permitted by law.

Included in other assets on the Condensed Consolidated Balance Sheets are cost-method investments. The carrying amounts of cost-method investments were $5.4 and $5.8 million at June 30, 2011 and December 31, 2010, respectively. Cost-method investments primarily include non-marketable equity investments, such as FHLB of Atlanta stock and Federal Reserve Bank (“FRB”) stock.

The fair values and gross unrealized losses on securities at June 30, 2011 and December 31, 2010, respectively, segregated by those securities that have been in an unrealized loss position for less than twelve months and twelve months or more are presented below.

				Less than 12 Months		12 Months or Longer		Total
				Fair	Unrealized	Fair	Unrealized	Fair		Unrealized
(Dollars in thousands)				Value	Losses	Value	Losses	Value		Losses
June 30, 2011:
Agency obligations			$	27,704	424	—	—	27,704	$	424
Agency RMBS				65,363	532	—	—	65,363		532
State and political subdivisions				10,604	193	3,459	160	14,063		353
Trust preferred securities:
	Pooled			—	—	20	210	20		210
	Individual issuer			—	—	866	134	866		134
		Total	$	103,671	1,149	4,345	504	108,016	$	1,653


December 31, 2010:
Agency obligations			$	45,351	1,017	—	—	45,351	$	1,017
Agency RMBS				89,840	1,441	—	—	89,840		1,441
State and political subdivisions				49,176	2,323	3,207	478	52,383		2,801
Trust preferred securities:
	Pooled			—	—	20	210	20		210
	Individual issuer			—	—	847	153	847		153
		Total	$	184,367	4,781	4,074	841	188,441	$	5,622

The applicable date for determining when securities are in an unrealized loss position is June 30, 2011. As such, it is possible that a security in an unrealized loss position at June 30, 2011 had a market value that exceeded its amortized cost on other days during the past twelve-month period.

For the securities in the previous table, the Company does not have the intent to sell and has determined it is not more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis, which may be maturity. The Company has assessed each security for credit impairment. For debt securities, the Company evaluates, where necessary, whether credit impairment exists by comparing the present value of the expected cash flows to the securities' amortized cost basis. For cost-method investments, the Company evaluates whether an event or change in circumstances has occurred during the reporting period that may have a significant adverse effect on the fair value of the investment.

In determining whether a loss is temporary, the Company considers all relevant information including:

To the extent the Company estimates future expected cash flows, the Company considered all available information in developing those expected cash flows. For asset-backed securities such as pooled trust preferred securities, such information generally included:

The unrealized losses associated with agency obligations are primarily driven by changes in interest rates and not due to the credit quality of the securities. These securities are issued by U.S. government agencies or government-sponsored entities and do not have any credit losses given the explicit or implicit government guarantee.

The unrealized losses associated with Agency RMBS are primarily driven by changes in interest rates and not due to the credit quality of the securities. These securities are issued by U.S. government agencies or government-sponsored entities and do not have any credit losses given the explicit or implicit government guarantee.

The unrealized losses associated with securities of U.S. states and political subdivisions are primarily driven by changes in interest rates and are not due to the credit quality of the securities. These securities will continue to be monitored as part of the Company's quarterly impairment analysis, but are expected to perform even if the rating agencies reduce the credit rating of the bond insurers. As a result, the Company expects to recover the entire amortized cost basis of these securities.

The unrealized losses associated with pooled trust preferred securities are primarily driven by higher projected collateral losses and wider credit spreads. Pooled trust preferred securities primarily consist of securities issued by community banks and thrifts. The Company assesses impairment for these securities using a cash flow model. The key assumptions include default probabilities of the underlying collateral and recoveries on collateral defaults. Based upon the Company's assessment of the expected credit losses for these securities, and given the performance of the underlying collateral compared to the Company's credit enhancement, the Company expects to recover the remaining amortized cost basis of these securities.

The unrealized losses associated with individual issuer trust preferred securities are primarily related to securities backed by individual issuer community banks. For individual issuers, management evaluates the financial performance of the issuer on a quarterly basis to determine if it is probable that the issuer can make all contractual principal and interest payments. Based upon its evaluation, the Company expects to recover the remaining amortized cost basis of these securities.

At June 30, 2011, cost-method investments with an aggregate cost of $5.4 million were not evaluated for impairment because the Company did not identify any events or changes in circumstances that may have a significant adverse effect on the fair value of these cost-method investments.

The carrying values of the Company's investment securities could decline in the future if the underlying performance of the collateral for pooled trust preferred securities, the financial condition of individual issuers of trust preferred securities, or the credit quality of other securities deteriorate and the Company determines it is probable that it will not recover the entire amortized cost basis for the security. As a result, there is a risk that significant other-than-temporary impairment charges may occur in the future.

The following tables show the applicable credit ratings, fair values, gross unrealized losses, and life-to-date impairment charges for pooled and individual issuer trust preferred securities at June 30, 2011 and December 31, 2010, respectively, segregated by those securities that have been in an unrealized loss position for less than twelve months and twelve months or more.

Trust Preferred Securities as of		June 30, 2011
								Unrealized Losses				Life-to-date
			Credit Rating			Fair	Less than		12 months			Impairment
(Dollars in thousands)			Moody's	Fitch		Value	12 months		or Longer	Total		Charges
Pooled:
ALESCO Preferred Funding XVII Ltd (a)			C	CC	$	20		—	210	210	$	1,770
Individual issuer (b):
Carolina Financial Capital Trust I			n/a	n/a		260		—	—	—		190
Main Street Bank Statutory Trust I (c)			n/a	n/a		459		—	41	41		—
MNB Capital Trust I			n/a	n/a		143		—	—	—		362
PrimeSouth Capital Trust I			n/a	n/a		161		—	—	—		339
TCB Trust			n/a	n/a		407		—	93	93		—
United Community Capital Trust			n/a	n/a		801		—	—	—		379
	Total individual issuer					2,231		—	134	134		1,270
Total trust preferred securities					$	2,251		—	344	344	$	3,040
n/a - not applicable securities not rated.
(a) Class B Deferrable Third Priority Secured Floating Rate Notes. The underlying collateral is primarily composed of
	trust preferred securities issued by community banks and thrifts.
(b) 144A Floating Rate Capital Securities. Underlying issuer is a community bank holding company. Securities have no
	excess subordination or overcollateralization.
(c) Now an obligation of BB&T Corporation.

Trust Preferred Securities as of		December 31, 2010
								Unrealized Losses				Life-to-date
			Credit Rating			Fair	Less than		12 months			Impairment
(Dollars in thousands)			Moody's	Fitch		Value	12 months		or Longer	Total		Charges
Pooled:
ALESCO Preferred Funding XVII Ltd (a)			Ca	C	$	20		—	210	210	$	1770
Individual issuer (b):
Carolina Financial Capital Trust I			n/a	n/a		312		—	—	—		138
Main Street Bank Statutory Trust I (c)			n/a	n/a		438		—	62	62		—
MNB Capital Trust I			n/a	n/a		152		—	—	—		348
PrimeSouth Capital Trust I			n/a	n/a		197		—	—	—		303
TCB Trust			n/a	n/a		409		—	91	91		—
United Community Capital Trust			n/a	n/a		621		—	—	—		379
	Total individual issuer					2,129		—	153	153		1,168
Total trust preferred securities					$	2,149		—	363	363	$	2,938
n/a - not applicable securities not rated.
(a) Class B Deferrable Third Priority Secured Floating Rate Notes. The underlying collateral is primarily composed of
	trust preferred securities issued by community banks and thrifts.
(b) 144A Floating Rate Capital Securities. Underlying issuer is a community bank holding company. Securities have no
	excess subordination or overcollateralization.
(c) Now an obligation of BB&T Corporation.

For pooled trust preferred securities, the Company estimated expected future cash flows of the security by estimating the expected future cash flows of the underlying collateral and applying those collateral cash flows, together with any credit enhancements such as subordination interests owned by third parties, to the security. The expected future cash flows of the underlying collateral are determined using the remaining contractual cash flows adjusted for future expected credit losses (which consider default probabilities derived from issuer credit ratings for the underlying collateral). The probability-weighted expected future cash flows of the security are then discounted at the interest rate used to recognize income on the security to arrive at a present value amount.

Excess subordination is defined as the amount of performing collateral that is in excess of what is needed to pay-off a specified class of securities and all classes senior to the specified class. Performing collateral is defined as total collateral minus all collateral that is currently deferring or currently in default. This definition assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure the deferral, or some portion greater than zero could be recovered on default of an underlying issuer. Excess subordination, as defined previously, does not consider any excess interest spread that is built into the structure of the security, which provides another source of repayment for the bonds.

At June 30, 2011 and December 31, 2010, respectively, there was no excess subordination for the Class B notes of ALESCO Preferred Funding XVII, Ltd.

On a quarterly basis, management makes an assessment to determine whether there have been events or economic circumstances to indicate that a security on which there is an unrealized loss is other-than-temporarily impaired. For equity securities with an unrealized loss, the Company considers many factors including the severity and duration of the impairment; the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value; and recent events specific to the issuer or industry. Equity securities on which there is an unrealized loss that is deemed to be other-than-temporary are written down to fair value with the write-down recorded as a realized loss in securities gains (losses), net.

For debt securities with an unrealized loss, an other-than-temporary impairment write-down is triggered when (1) the Company has the intent to sell a debt security, (2) it is more likely than not that the Company will be required to sell the debt security before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the debt security. If the Company has the intent to sell a debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery, the other-than-temporary write-down is equal to the entire difference between the debt security's amortized cost and its fair value. If the Company does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the other-than-temporary impairment write-down is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings, as a realized loss in securities gains (losses), and is the difference between the security's amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security's fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income, net of applicable taxes.

The following table presents a roll-forward of the credit loss component of the amortized cost of debt securities that the Company has written down for other-than-temporary impairment and the credit component of the loss is recognized in earnings (referred to as “credit-impaired” debt securities). Other-than-temporary impairments recognized in earnings for the quarters and six months ended June 30, 2011 and 2010 for credit-impaired debt securities are presented as additions in two components based upon whether the current period is the first time the debt security was credit-impaired (initial credit impairment) or is not the first time the debt security was credit-impaired (subsequent credit impairments). The credit loss component is reduced if the Company sells, intends to sell or believes it will be required to sell previously credit-impaired debt securities. Additionally, the credit loss component is reduced if the Company receives cash flows in excess of what it expected to receive over the remaining life of the credit-impaired debt security, the security matures or is fully written-down and deemed worthless. Changes in the credit loss component of credit-impaired debt securities were:

				Quarter ended June 30,				Six months ended June 30,
(Dollars in thousands)				2011		2010		2011		2010
Balance, beginning of period			$	2,989	$	4,620	$	2,938	$	4,570
	Additions:
		Subsequent credit impairments		51		—		102		50
	Reductions:
		Securities sold		—		—		—		—
		Due to change in intent or requirement to sell		—		—		—		—
		Securities fully written down and deemed worthless		—		—		—		—
		Increases in expected cash flows		—		—		—		—
Balance, end of period			$	3,040	$	4,620	$	3,040	$	4,620

The following table presents details of the other-than-temporary impairment related to securities, including equity securities carried at cost, for the six months ended June 30, 2011 and 2010.

					Quarter ended June 30,				Six months ended June 30,
(Dollars in thousands)					2011		2010		2011		2010
Other-than-temporary impairment charges
	(included in earnings):
	Debt securities:
		Pooled trust preferred securities		$	—	$	—	$	—	$	50
		Individual issuer trust preferred securities			51		—		102		—
			Total debt securities		51		—		102		50
	Cost-method investments				—		—		—		—
Total other-than-temporary impairment charges				$	51	$	—	$	102	$	50
Other-than-temporary impairment on debt securities:
	Recorded as part of gross realized losses:
		Credit-related		$	51		—	$	102	$	50
		Securities with intent to sell			—		—		—		—
	Recorded directly to other comprehensive income
		for non-credit related impairment			—		20		210		210
Total other-than-temporary impairment on debt securities				$	51	$	20	$	312	$	260

Realized Gains and Losses

The following table presents the gross realized gains and losses on securities, including cost-method investments.
Realized losses include other-than-temporary impairment charges.

			Quarter ended June 30,				Six months ended June 30,
(Dollars in thousands)			2011		2010		2011		2010
Gross realized gains		$	877	$	1,431	$	905	$	2,570
Gross realized losses			(483)		—		(557)		(89)
	Realized gains, net	$	394	$	1,431	$	348	$	2,481