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Investment Securities

3 Months Ended

Mar. 31, 2012

Investment Securities [Abstract]

Investment Securities

6. Investment Securities

The cost basis and fair values of investment securities are summarized as follows (in thousands):

Investment securities available for sale (AFS):

		March 31, 2012
		Cost Basis				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
U.S. Agency		$	7,182			$	46			$	(39	)		$	7,189
U.S. Agency mortgage- backed securities			161,402				6,758				(46	)			168,114
Corporate bonds			2,990				—				(31	)			2,959
Total		$	171,574			$	6,804			$	(116	)		$	178,262

Investment securities held to maturity (HTM):

		March 31, 2012
		Cost Basis				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
U.S. Agency mortgage- backed securities		$	8,827			$	606			$	—			$	9,433
Other securities			3,000				—				(8	)			2,992
Total		$	11,827			$	606			$	(8	)		$	12,425

Investment securities available for sale (AFS):

		December 31, 2011
		Cost Basis				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
U.S. Agency		$	10,689			$	48			$	(28	)		$	10,709
U.S. Agency mortgage- backed securities			165,484				6,737				(7	)			172,214
Total		$	176,173			$	6,785			$	(35	)		$	182,923

Investment securities held to maturity (HTM):

		December 31, 2011
		Cost Basis				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
U.S. Agency mortgage- backed securities		$	9,280			$	643			$	—			$	9,923
Other securities			3,000				—				(9	)			2,991
Total		$	12,280			$	643			$	(9	)		$	12,914

Maintaining investment quality is a primary objective of the Company's investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody's Investor's Service or Standard & Poor's rating of "A." At March 31, 2012, 97.3% of the portfolio was rated "AAA" as compared to 98.4% at December 31, 2011. None of the portfolio was rated below "A" or unrated at March 31, 2012. The Company has no exposure to subprime mortgage loans in the investment portfolio. At March 31, 2012, the Company's consolidated investment securities portfolio had a modified duration of approximately 2.03 years. Total proceeds from the sale of AFS securities were $16.5 million in the first three months of 2011. The Company had no such sales in the first quarter of 2012. The Company had no gross gains or losses on investment security sales in the first three months of 2012 compared to $358,000 of gross investment security losses for the first three months of 2011.

The book value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits, and certain Federal Home Loan Bank borrowings was $81,530,000 at December 31, 2012 and $83,235,000 at December 31, 2011.

The following tables present information concerning investments with unrealized losses as of March 31, 2012 and December 31, 2011 (in thousands):

Investment securities available for sale:

		March 31, 2012
		Less than 12 months								12 months or longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
U.S. Agency		$	—			$	—			$	3,020			$	(39	)		$	3,020			$	(39	)
U.S. Agency mortgage-backed securities			7,228				(42	)			544				(4	)			7,772				(46	)
Corporate bonds			2,959				(31	)			—				—				2,959				(31	)
Total		$	10,187			$	(73	)		$	3,564			$	(43	)		$	13,751			$	(116	)

Investment securities held to maturity:

			000000000000				000000000000				000000000000				000000000000				000000000000				000000000000
		March 31, 2012
		Less than 12 months								12 months or longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Other securities		$	1,992			$	(7	)		$	1,000			$	(1	)		$	2,992			$	(8	)
Total		$	1,992			$	(7	)		$	1,000			$	(1	)		$	2,992			$	(8	)

Investment securities available for sale:

			000000000000				000000000000				000000000000				000000000000				000000000000				000000000000
		December 31, 2011
		Less than 12 months								12 months or longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
U.S. Agency		$	3,161			$	(28	)		$	—			$	—			$	3,161			$	(28	)
U.S. Agency mortgage-backed securities			613				(7	)			—				—				613				(7	)
Total		$	3,774			$	(35	)		$	—			$	—			$	3,774			$	(35	)

Investment securities held to maturity:

			000000000000				000000000000				000000000000				000000000000				000000000000				000000000000
		December 31, 2011
		Less than 12 months								12 months or longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Other securities		$	1,991			$	(9	)		$	—			$	—			$	1,991			$	(9	)
Total		$	1,991			$	(9	)		$	—			$	—			$	1,991			$	(9	)

The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are ten positions that are considered temporarily impaired at March 31, 2012, an increase of five from December 31, 2011. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value.

Contractual maturities of securities at March 31, 2012, are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties.

Investment securities available for sale:

		March 31, 2012
Cost Basis		U.S. Agency				U.S. Agency Mortgage- Backed Securities				Corporate Bonds				Total Investment Securities Available For Sale
Within 1 year		$	—			$	—			$	—			$	—
After 1 year but within 5 years			7,182				—				2,990				10,172
After 5 years but within 10 years			—				14,061				—				14,061
After 10 years but within15 years			—				72,951				—				72,951
Over 15 years			—				74,390				—				74,390
Total		$	7,182			$	161,402			$	2,990			$	171,574

		March 31, 2012
Fair Value		U.S. Agency				U.S. Agency Mortgage- Backed Securities				Corporate Bonds				Total Investment Securities Available For Sale
Within 1 year		$	—			$	—			$	—			$	—
After 1 year but within 5 years			7,189				—				2,959				10,148
After 5 years but within 10 years			—				14,956				—				14,956
After 10 years but within 15 years			—				75,867				—				75,867
Over 15 years			—				77,291				—				77,291
Total		$	7,189			$	168,114			$	2,959			$	178,262

Investment securities held to maturity:

		March 31, 2012
Cost Basis		U.S. Agency Mortgage- Backed Securities				Other Securities				Total Investment Securities Held To Maturity
Within 1 year		$	—			$	1,000			$	1,000
After 1 year but within 5 years			—				2,000				2,000
After 5 years but within 10 years			—				—				—
After 10 years but within 15 years			—				—				—
Over 15 years			8,827				—				8,827
Total		$	8,827			$	3,000			$	11,827

		March 31, 2012
Fair Value		U.S. Agency Mortgage- Backed Securities				Other Securities				Total Investment Securities Held To Maturity
Within 1 year		$	—			$	1,000			$	1,000
After 1 year but within 5 years			—				1,992				1,992
After 5 years but within 10 years			—				—				—
After 10 years but within 15 years			—				—				—
Over 15 years			9,433				—				9,433
Total		$	9,433			$	2,992			$	12,425

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- Definition

Tabular disclosure of investments in certain debt and equity securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 320

-SubTopic 10

-Section 50

-Paragraph 10

-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563



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-Name Accounting Standards Codification

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 115

-Paragraph 3, 19, 20, 21, 22, 137

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



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