Investment Securities

3 Months Ended

Mar. 31, 2012

Investment Securities [Abstract]

Investment Securities

Note 2. 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 March 31, 2012 and December 31, 2011 by contractual maturity within each type.

	At March 31, 2012									At December 31, 2011
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Held-to-Maturity
Corporate bonds:
After 1 year to 5 years	$	45,671	$	738	$	—		$	46,409	$	45,804	$	154	$	(319	)	$	45,639
		45,671		738		—			46,409		45,804		154		(319	)		45,639
Total	$	45,671	$	738	$	—		$	46,409	$	45,804	$	154	$	(319	)	$	45,639
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		10,007		51		—			10,058		10,009		77		—			10,086
After 1 year to 5 years		127,814		860		(186	)		128,488		143,189		1,022		(33	)		144,178
		137,821		911		(186	)		138,546		153,198		1,099		(33	)		154,264
State and political subdivisions:
Within 1 year		751		2		—			753		752		5		—			757
After 1 year to 5 years		8,446		289		(16	)		8,719		10,082		308		(16	)		10,374
After 5 years to 10 years		21,911		818		(116	)		22,613		11,846		664		(3	)		12,507
Over 10 years		83,658		5,089		(1	)		88,746		87,896		5,472		(1	)		93,367
		114,766		6,198		(133	)		120,831		110,576		6,449		(20	)		117,005
Residential mortgage-backed securities:
After 5 years to 10 years		19,374		771		—			20,145		20,745		743		—			21,488
Over 10 years		81,824		1,891		(180	)		83,535		55,328		2,665		(680	)		57,313
		101,198		2,662		(180	)		103,680		76,073		3,408		(680	)		78,801
Commercial mortgage obligations:
After 5 years to 10 years		2,222		58		—			2,280		5,547		124		—			5,671
Over 10 years		27,942		433		—			28,375		54,994		799		—			55,793
		30,164		491		—			30,655		60,541		923		—			61,464
Corporate bonds:
After 1 year to 5 years		4,991		—		(26	)		4,965		4,991		—		(224	)		4,767
		4,991		—		(26	)		4,965		4,991		—		(224	)		4,767
Money market mutual funds:
Within 1 year		4,406		—		—			4,406		3,851		—		—			3,851
		4,406		—		—			4,406		3,851		—		—			3,851
Equity securities:
No stated maturity		2,331		763		(415	)		2,679		2,364		544		(224	)		2,684
		2,331		763		(415	)		2,679		2,364		544		(224	)		2,684
Total	$	395,677	$	11,025	$	(940	)	$	405,762	$	414,119	$	12,423	$	(1,181	)	$	425,361

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 $322.8 million and $338.5 million at March 31, 2012 and December 31, 2011, 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 three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
(Dollars in thousands)	2012		2011
Securities available for sale:
Proceeds from sales	$	62,107	$	—
Gross realized gains on sales		1,154		—
Gross realized losses on sales		896		—
Tax expense related to net realized gains on sales		90		—

Accumulated other comprehensive income related to securities of $6.6 million and $7.3 million, net of taxes, has been included in shareholders’ equity at March 31, 2012 and December 31, 2011, respectively. Unrealized losses in investment securities at March 31, 2012 and December 31, 2011 do not represent other-than-temporary impairments.

The Corporation realized other-than-temporary impairment charges to noninterest income of $3 thousand and $7 thousand, respectively, on its equity portfolio during the three months ended March 31, 2012 and 2011. The Corporation determined that it was probable that the fair value of certain equity securities would not recover 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 equity securities in an unrealized loss position, 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 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 does not consider these investments to be other-than-temporarily impaired at March 31, 2012 and December 31, 2011.

Management evaluates debt securities, which are comprised of U. S. Government, Government Sponsored Agencies, municipalities, corporate bonds and other issuers, for other-than-temporary impairment and considers the current economic conditions, the length of time and the extent to which the fair value has been less than cost, interest rates and the bond rating of each security. All of the debt securities are rated as investment grade and management believes that it will not incur any losses. The unrealized losses on the Corporation’s investments in debt securities are temporary in nature since they are primarily related to market interest rates and are not related to the underlying credit quality of the issuers within our investment portfolio. The Corporation does not have the intent to sell the debt securities and believes it is more likely than not, that it will not have to sell the securities before recovery of their cost basis. The Corporation has not recognized any other-than-temporary impairment charges on debt securities for the three months ended March 31, 2012 and 2011.

At March 31, 2012 and December 31, 2011, 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 March 31, 2012 and December 31, 2011:

	At March 31, 2012
	Less than Twelve Months					Twelve Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government corporations and agencies	$	35,095	$	(186	)	$	—	$	—		$	35,095	$	(186	)
State and political subdivisions		7,131		(115	)		958		(18	)		8,089		(133	)
Residential mortgage-backed securities		36,192		(180	)		—		—			36,192		(180	)
Corporate bonds		4,965		(26	)		—		—			4,965		(26	)
Equity securities		11		(2	)		668		(413	)		679		(415	)
Total	$	83,394	$	(509	)	$	1,626	$	(431	)	$	85,020	$	(940	)
	At December 31, 2011
	Less than Twelve Months					Twelve Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government corporations and agencies	$	24,967	$	(33	)	$	—	$	—		$	24,967	$	(33	)
State and political subdivisions		—		—			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	)