Investment Securities

6 Months Ended

Jun. 30, 2013

Investment Securities

Investment Securities

Note 4 - Investment Securities

The amortized cost and estimated fair value of securities were as follows:

	June 30, 2013
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	73	$	10	$	—		$	83
Corporate	9,169		—		—			9,169
Municipal bonds	96,257		226		(1,736		)	94,747
Mortgage-backed securities	210,367		736		(2,055		)	209,048
Total securities available for sale	315,866		972		(3,791		)	313,047

	December 31, 2012
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	147	$	12	$	—		$	159
Municipal bonds	25,401		1,186		(1		)	26,586
Mortgage-backed securities	56,641		1,162		(482		)	57,321
Total securities available for sale	82,189		2,360		(483		)	84,066

	June 30, 2012
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	247	$	14	$	—		$	261
Municipal bonds	39,928		1,259		(71		)	41,116
Mortgage-backed securities	103,990		1,389		(622		)	104,757
Total securities available for sale	144,165		2,662		(693		)	146,134

At June 30, 2013, the Company had an $8.6 million investment in FHLB stock carried at cost.  During the second quarter of 2013, the FHLB has repurchased $1.9 million of the Company’s excess FHLB stock through its stock repurchase program.

At June 30, 2013, mortgage-backed securities (“MBS”) with an estimated par value of $34.8 million and a fair value of $36.0 million were pledged as collateral for the Bank’s three reverse repurchase agreements which totaled $28.5 million.

The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position.

	June 30, 2013
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)
Municipal bonds	122	$	51,937	$	(1,736	)	—	$	—	$	—		122	$	51,937	$	(1,736	)
Mortgage-backed securities	29	86,940		(1,916		)	17	713		(138		)	46	87,653		(2,054		)
Total	151	$	138,877	$	(3,652	)	17	$	713	$	(138	)	168	$	139,590	$	(3,790	)

	December 31, 2012
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)
Municipal bonds	1	$	292	$	(1	)	—	$	—	$	—		1	$	292	$	(1	)
Mortgage-backed securities	2	15,128		(152		)	31	1,012		(330		)	33	16,140		(482		)
Total	3	$	15,420	$	(153	)	31	$	1,012	$	(330	)	34	$	16,432	$	(483	)

	June 30, 2012
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)
Municipal bonds	12	$	5,245	$	(71	)	—	$	—	$	—		12	$	5,245	$	(71	)
Mortgage-backed securities	7	21,090		(82		)	41	1,185		(540		)	48	22,275		(622		)
Total	19	$	26,335	$	(153	)	41	$	1,185	$	(540	)	60	$	27,520	$	(693	)

The amortized cost and estimated fair value of investment securities available for sale at June 30, 2013, by contractual maturity are shown in the table below.

	One Year				More than One				More than Five Years				More than
	or Less				Year to Five Years				to Ten Years				Ten Years				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value
	(dollars in thousands)
Investment securities available for sale:
U.S. Treasury	$	—	$	—	$	73	$	83	$	—	$	—	$	—	$	—	$	73	$	83
Corporate	2,006		2,006		7,163		7,163		—		—		—		—		9,169		9,169
Municipal bonds	—		—		7,998		7,900		43,271		42,550		44,988		44,297		96,257		94,747
Mortgage-backed securities	—		—		51		54		16,080		15,931		194,235		193,063		210,366		209,048
Total investment securities available for sale	2,006		2,006		15,285		15,200		59,351		58,481		239,223		237,360		315,865		313,047

Any temporary impairment is a result of the change in market interest rates and not the underlying issuers’ ability to repay.  The Company has the intent and ability to hold these securities until the temporary impairment is eliminated.  Accordingly, the Company has not recognized the temporary impairment in earnings.

Unrealized gains and losses on investment securities available for sale are recognized in stockholders’ equity as accumulated other comprehensive income (loss).  At June 30, 2013, the Company had accumulated other comprehensive loss  of $2.8 million, or $1.7 million net of tax, compared to accumulated other comprehensive income of $1.9 million, or $1.1 million net of tax, at December 31, 2012.