Mortgage-Backed Securities Available for Sale

3 Months Ended

Mar. 31, 2013

Investments Debt And Equity Securities [Abstract]

Mortgage-Backed Securities Available for Sale

Note 4. Mortgage-Backed Securities Available for Sale

The amortized cost and estimated market value of mortgage-backed securities available for sale at March 31, 2013 and December 31, 2012 are as follows (in thousands):

March 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
FHLMC	$	150,415	$	1,586	$	(103	)	$	151,898
FNMA		222,189		8,144		(84	)		230,249
GNMA		785		202		—			987
	$	373,389	$	9,932	$	(187	)	$	383,134

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
FHLMC	$	118,294	$	1,284	$	(53	)	$	119,525
FNMA		204,296		9,017		(11	)		213,302
GNMA		824		206		—			1,030
	$	323,414	$	10,507	$	(64	)	$	333,857

There were no gains or losses realized on the sale of mortgage-backed securities available for sale for the three months ended March 31, 2013 and 2012.

The contractual maturities of mortgage-backed securities available for sale vary; however, the effective lives are expected to be shorter than the contractual maturity date due to principal prepayments.

The estimated market value and unrealized loss for mortgage-backed securities available for sale at March 31, 2013 and December 31, 2012, segregated by the duration of the unrealized loss are as follows (in thousands):

	Less than 12 months					12 months or longer				Total
March 31, 2013	Estimated Market Value		Unrealized Losses			Estimated Market Value		Unrealized Losses		Estimated Market Value		Unrealized Losses
FHLMC	$	32,086	$	(103	)	$	—	$	—	$	32,086	$	(103	)
FNMA		19,659		(84	)		—		—		19,659		(84	)
	$	51,745	$	(187	)	$	—	$	—	$	51,745	$	(187	)
	Less than 12 months					12 months or longer				Total
December 31, 2012	Estimated Market Value		Unrealized Losses			Estimated Market Value		Unrealized Losses		Estimated Market Value		Unrealized Losses
FHLMC	$	16,186	$	(53	)	$	—	$	—	$	16,186	$	(53	)
FNMA		4,871		(11	)		—		—		4,871		(11	)
	$	21,057	$	(64	)	$	—	$	—	$	21,057	$	(64	)

The mortgage-backed securities are issued and guaranteed by either FHLMC or FNMA, corporations which are chartered by the United States Government and whose debt obligations are typically rated AA+ by one of the internationally-recognized credit rating services. FHLMC and FNMA have been under the conservatorship of the Federal Housing Financial Agency since September 8, 2008. The conservatorships have no specified termination date. Also, FHLMC and FNMA have entered into Stock Purchase Agreements, which following the issuance of Senior Preferred Stock and Warrants to the United States Treasury, provide FHLMC and FNMA funding commitments from the United States Treasury. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated market value of the mortgage-backed securities. Although these mortgage-backed securities are available for sale, the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that unrealized losses on these available for sale securities were only temporarily impaired at March 31, 2013.