INVESTMENT SECURITIES AVAILABLE FOR SALE

9 Months Ended

Sep. 30, 2012

Investment Securities Available For Sale

INVESTMENT SECURITIES AVAILABLE FOR SALE

3. INVESTMENT SECURITIES AVAILABLE FOR SALE

A summary of amortized cost and approximate fair value of securities available for sale included in the consolidated statements of condition as of September 30, 2012 and December 31, 2011 follows:

	September 30, 2012
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
(In thousands)	Cost		Gains		Losses			Value
U.S. government-sponsored entities	$	29,645	$	312	$	—			29,957
Mortgage-backed securities – residential		181,538		5,906		(1	)		187,443
State and political subdivisions		29,115		1,511		(1	)		30,625
Other securities		5,998		98		(845	)		5,251
Marketable equity securities		209		4		—			213
Total	$	246,505	$	7,831	$	(847	)	$	253,489

	December 31, 2011
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
(In thousands)	Cost		Gains		Losses			Value
U.S. government-sponsored entities	$	46,729	$	149	$	—		$	46,878
Mortgage-backed securities – residential		232,240		4,891		(147	)		236,984
State and political subdivisions		28,539		1,314		(2	)		29,851
Other securities		5,999		40		(832	)		5,207
Marketable equity securities		593		7		—			600
Total	$	314,100	$	6,401	$	(981	)	$	319,520

The following tables present the Corporation’s available for sale securities with continuous unrealized losses and the approximate fair value of these investments as of September 30, 2012 and December 31, 2011.

	September 30, 2012
	Duration of Unrealized Loss
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrecognized			Fair		Unrecognized			Fair		Unrecognized
(In thousands)	Value		Losses			Value		Losses			Value		Losses
Mortgage-backed securities -
residential	$	—	$	—		$	95	$	(1	)	$	95	$	(1	)
State and political subdivisions		36		(1	)		—		—			36		(1	)
Other securities		—		—			2,153		(845	)		2,153		(845	)
Total	$	36	$	(1	)	$	2,248	$	(846	)	$	2,284	$	(847	)

	December 31, 2011
	Duration of Unrealized Loss
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrecognized			Fair		Unrecognized			Fair		Unrecognized
(In thousands)	Value		Losses			Value		Losses			Value		Losses
Mortgage-backed securities-
residential	$	32,931	$	(120	)	$	317	$	(27	)	$	33,248	$	(147	)
State and political subdivisions		736		(2	)		—		—			736		(2	)
Other securities		—		—			2,167		(832	)		2,167		(832	)
Total	$	33,667	$	(122	)	$	2,484	$	(859	)	$	36,151	$	(981	)

Management believes that the unrealized losses on investment securities available for sale are temporary and due to interest rate fluctuations and/or volatile market conditions rather than the creditworthiness of the issuers. The Corporation does not intend to sell these securities nor is it likely that it will be required to sell the securities before their anticipated recovery; however, Management also closely monitors market conditions and may sell the securities if it determines it would be beneficial to do so.

At September 30, 2012, the unrealized loss on other securities, $845 thousand, is related to a debt security issued by a large bank holding company that has experienced declines in all its securities due to the turmoil in the financial markets and a merger. The security, a single-issuer trust preferred security, was downgraded to below investment grade by Moody’s and is currently rated Ba1. Management monitors the performance of the issuer on a quarterly basis to determine if there are any credit events that could result in deferral or default of the security. Management believes the depressed valuation is a result of the nature of the security, a trust preferred bond, and the bond’s very low yield. As Management does not intend to sell this security nor is it likely that it will be required to sell the security before its anticipated recovery, the security is not considered other-than-temporarily impaired at September 30, 2012.