INVESTMENT SECURITIES AVAILABLE FOR SALE

6 Months Ended

Jun. 30, 2013

Investment Securities Available For Sale

INVESTMENT SECURITIES AVAILABLE FOR SALE

2. 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 June 30, 2013 and December 31, 2012 follows:

	June 30, 2013
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
(In thousands)	Cost		Gains		Losses			Value
U.S. government-sponsored entities	$	15,982	$	—	$	(575	)		15,407
Mortgage-backed securities – residential		191,993		3,256		(838	)		194,411
State and political subdivisions		54,750		542		(102	)		55,190
Single-issuer trust preferred security		2,999		—		(614	)		2,385
CRA investment		3,000		—		(59	)		2,941
Total	$	268,724	$	3,798	$	(2,188	)	$	270,334

	December 31, 2012
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
(In thousands)	Cost		Gains		Losses			Value
U.S. government-sponsored entities	$	26,647	$	200	$	(2	)	$	26,845
Mortgage-backed securities – residential		215,092		6,366		(18	)		221,440
State and political subdivisions		49,262		1,372		(2	)		50,632
Single-issuer trust preferred security		2,999		—		(710	)		2,289
CRA investment		3,000		62		—			3,062
Marketable equity securities		210		1		—			211
Total	$	297,210	$	8,001	$	(732	)	$	304,479

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 June 30, 2013 and December 31, 2012.

	June 30, 2013
	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
U.S. government sponsored
entities	$	15,407	$	(575	)	$	—	$	—		$	15,407	$	(575	)
Mortgage-backed securities -
residential		51,886		(834	)		83		(4	)		51,969		(838	)
State and political subdivisions		6,351		(102	)		—		—			6,351		(102	)
Single-issuer trust preferred
security		—		—			2,385		(614	)		2,385		(614	)
CRA investment		2,941		(59	)		—		—			2,941		(59	)
Total	$	76,585	$	(1,570	)	$	2,468	$	(618	)	$	79,053	$	(2,188	)

	December 31, 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
U.S. government sponsored
Entities	$	4,998	$	(2	)	$	—	$	—		$	4,998	$	(2	)
Mortgage-backed securities-
residential		8,433		(17	)		95		(1	)		8,528		(18	)
State and political subdivisions		1,290		(2	)		—		—			1,290		(2	)
Single-issuer trust preferred
Security		—		—			2,289		(710	)		2,289		(710	)
Total	$	14,721	$	(21	)	$	2,384	$	(711	)	$	17,105	$	(732	)

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. As of June 30, 2013, 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; therefore, none of the securities in unrealized loss position were determined to be other-than-temporarily impaired.

At June 30, 2013, the unrealized loss on the single-issuer trust preferred security of $614 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 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 June 30, 2013.