Investment Securities

12 Months Ended

Dec. 31, 2011

Investment Securities [Abstract]

Investment Securities

Note 3. Investment Securities

The following table shows the amortized cost and the estimated fair value of the held-to-maturity securities and available-for-sale securities at December 31, 2011 and 2010, by contractual maturity within each type:

	December 31, 2011									December 31, 2010
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
Securities Held-to-Maturity
Residential mortgage-backed securities:
Within 1 year	$	—	$	—	$	—		$	—	$	15	$	—	$	—		$	15
		—		—		—			—		15		—		—			15
Corporate bonds:
After 1 year to 5 years		45,804		154		(319	)		45,639		—		—		—			—
		45,804		154		(319	)		45,639		—		—		—			—
Other securities:
Within 1 year		—		—		—			—		17		—		—			17
		—		—		—			—		17		—		—			17
Total	$	45,804	$	154	$	(319	)	$	45,639	$	32	$	—	$	—		$	32
Securities Available-for-Sale
U.S. treasuries:
Within 1 year	$	2,525	$	—	$	—		$	2,525	$	—	$	—	$	—		$	—
		2,525		—		—			2,525		—		—		—			—
U.S. government corporations and agencies:
Within 1 year		10,009		77		—		$	10,086		7,000		—		—			7,000
After 1 year to 5 years		143,189		1,022		(33	)		144,178		182,585		515		(2,000	)		181,100
		153,198		1,099		(33	)		154,264		189,585		515		(2,000	)		188,100
State and political subdivisions:
Within 1 year		752		5		—			757		451		—		—			451
After 1 year to 5 years		10,082		308		(16	)		10,374		8,801		281		—			9,082
After 5 years to 10 years		11,846		664		(3	)		12,507		14,042		281		(69	)		14,254
Over 10 years		87,896		5,472		(1	)		93,367		86,315		639		(2,693	)		84,261
		110,576		6,449		(20	)		117,005		109,609		1,201		(2,762	)		108,048
Residential mortgage-backed securities:
After 5 years to 10 years		20,745		743		—			21,488		14,709		743		—			15,452
Over 10 years		55,328		2,665		(680	)		57,313		66,919		3,222		(492	)		69,649
		76,073		3,408		(680	)		78,801		81,628		3,965		(492	)		85,101
Commercial mortgage obligations:
After 5 years to 10 years		5,547		124		—			5,671		8,855		252		—			9,107
Over 10 years		54,994		799		—			55,793		63,827		1,321		(1,164	)		63,984
		60,541		923		—			61,464		72,682		1,573		(1,164	)		73,091
Corporate bonds:
Within 1 year		—		—		—			—		2,999		30		—			3,029
After 1 year to 5 years		4,991		—		(224	)		4,767		4,988		—		(43	)		4,945
		4,991		—		(224	)		4,767		7,987		30		(43	)		7,974
Money market mutual funds
Within 1 year		3,851		—		—			3,851		1,693		—		—			1,693
		3,851		—		—			3,851		1,693		—		—			1,693
Equity securities:
No stated maturity		2,364		544		(224	)		2,684		2,447		680		(142	)		2,985
		2,364		544		(224	)		2,684		2,447		680		(142	)		2,985
Total	$	414,119	$	12,423	$	(1,181	)	$	425,361	$	465,631	$	7,964	$	(6,603	)	$	466,992

Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties.

Securities with a fair value of $338.5 million and $347.3 million at December 31, 2011 and 2010, respectively, were pledged to secure public deposits and for other purposes as required by law.

The following table presents information related to sales of securities available for sale during the years ended December 31, 2011, 2010 and 2009.

	Years Ended December 31,
(Dollars in thousands)	2011		2010		2009
Securities available for sale:
Proceeds from sales	$	40,481	$	13,466	$	48,647
Gross realized gains on sales		1,428		453		1,178
Gross realized losses on sales		11		21		28
Tax expense related to net realized gains on sales		496		151		403

Accumulated other comprehensive income related to securities of $7.3 million and $884 thousand, net of taxes, has been included in shareholders’ equity at December 31, 2011 and 2010, respectively. Unrealized losses in investment securities at December 31, 2011 and 2010 do not represent other-than-temporary impairments.

The Corporation realized other-than-temporary impairment charges of $16 thousand and $62 thousand, respectively, to noninterest income on its equity portfolio during the years ended December 31, 2011 and 2010. The Corporation determined that it was probable that certain equity securities would not regain market value equivalent to the Corporation’s cost basis within a reasonable period of time due to a decline in the financial stability of the underlying companies. The Corporation carefully monitors all of its equity securities and has not taken impairment losses on certain other under-water equity securities, at this time, as the financial performance of the underlying companies is not indicative of the market deterioration of their stock and it is probable that the market value of the equity securities will recover to the Corporation’s cost basis in the individual securities in a reasonable amount of time. The equity securities within the following table consist of common stocks of other financial institutions, which have experienced recent declines in value consistent with the industry as a whole. Management evaluated the near-term prospects of the issuers in relation to the severity and duration of the impairment. The Corporation has the positive intent and ability to hold these securities and believes it is more likely than not, that it will not have to sell these securities until recovery to the Corporation’s cost basis occurs. The Corporation did not consider those investments to be other-than-temporarily impaired at December 31, 2011 and 2010.

At December 31, 2011 and 2010, there were no investments in any single non-federal issuer representing more than 10% of shareholders’ equity.

The following table shows the amount of securities that were in an unrealized loss position at December 31, 2011 and 2010:

	At December 31, 2011
	Less than Twelve					Twelve Months or
	Months					Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. government corporations and agencies	$	24,967	$	(33	)	$	—	$	—		$	24,967	$	(33	)
State and political subdivisions 16		—		—			1,997		(20	)		1,997		(20	)
Residential mortgage-backed securities		5,184		(20	)		3,311		(660	)		8,495		(680	)
Corporate bonds		34,851		(543	)		—		—			34,851		(543	)
Equity securities		920		(224	)		—		—			920		(224	)
Total	$	65,922	$	(820	)	$	5,308	$	(680	)	$	71,230	$	(1,500	)

	At December 31, 2010
	Less than Twelve					Twelve Months or
	Months					Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. government corporations and agencies	$	107,978	$	(2,000	)	$	—	$	—		$	107,978	$	(2,000	)
State and political subdivisions		52,531		(2,589	)		1,589		(173	)		54,120		(2,762	)
Residential mortgage-backed securities		10,096		(38	)		4,419		(454	)		14,515		(492	)
Commercial mortgage obligations		19,322		(1,164	)		—		—			19,322		(1,164	)
Corporate bonds		4,945		(43	)		—		—			4,945		(43	)
Equity securities		951		(140	)		17		(2	)		968		(142	)
Total	$	195,823	$	(5,974	)	$	6,025	$	(629	)	$	201,848	$	(6,603	)