(5) Investment Securities

The following is a summary of the securities portfolio by major classification:


	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available-for-sale:
Government-sponsored enterprises and FFCB bonds	$	3	$	23	$	—		$	26
Obligations of states and political subdivisions		33,200		762		(176	)		33,786
Mortgage-backed securities		124,784		1,278		(150	)		125,912
SBA-backed securities		151,877		970		(512	)		152,335
Corporate bonds		37,252		295		(796	)		36,751

	$	347,116	$	3,328	$	(1,634	)	$	348,810

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available-for-sale:
Government-sponsored enterprises and FFCB bonds	$	1,003	$	29	$	—		$	1,032
Obligations of states and political subdivisions		27,855		863		—			28,718
Mortgage-backed securities		130,949		1,460		(117	)		132,292
SBA-backed securities		146,195		774		(332	)		146,637
Corporate bonds		32,683		88		(2,000	)		30,771

	$	338,685	$	3,214	$	(2,449	)	$	339,450

Gross realized gains and losses on sales of securities for the three months ended March 31, 2012 and March 31, 2011 were as follows (dollars in thousands):


	Three months ended March 31, (Dollars in thousands)
	2012			2011
Gross realized gains	$	70		$	26
Gross realized losses		(25	)		—

Net realized (losses) gains	$	45		$	26

Analysis of Certain Investments in Debt and Equity Securities for Other Than Temporary Impairment

The following tables set forth the amount of unrealized losses at March 31, 2012 and December 31, 2011 (that is, the amount by which cost or amortized cost exceeds fair value), and the related fair value of investments with unrealized losses, none of which are considered to be other-than-temporarily impaired. The tables are segregated into investments that have been in a continuous unrealized-loss position for less than 12 months from those that have been in a continuous unrealized-loss position for 12 months or longer.

March 31, 2012


	Less Than 12 Months				12 Months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Obligations of states and political subdivisions	$	6,424	$	176	$	—	$	—	$	6,424	$	176
Mortgage-backed securities		29,576		114		2,800		36		32,376		150
SBA-backed securities		83,174		512		—		—		83,174		512
Corporate bonds		12,487		222		11,280		574		23,767		796

Total	$	131,661	$	1,024	$	14,080	$	610	$	145,741	$	1,634

December 31, 2011


	Less Than 12 Months				12 Months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Mortgage-backed securities	$	25,011	$	81	$	2,880	$	36	$	27,891	$	117
SBA-backed securities		62,543		332		—		—		62,543		332
Corporate bonds		11,824		485		13,755		1,515		25,579		2,000

Total	$	99,378	$	898	$	16,635	$	1,551	$	116,013	$	2,449

As of March 31, 2012 and December 31, 2011, management concluded that the unrealized losses presented above, which consisted of sixty-four securities at March 31, 2012 and fifty securities at December 31, 2011, are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company has the intent to hold these investments for a time necessary to recover their cost and it is not likely that the Bank would be required to sell prior to recovery. The sixty-four securities at March 31, 2012 were comprised of five obligations of states and political subdivisions, fifteen mortgage-backed securities, ten corporate bonds and thirty-four SBA-backed securities. The fifty securities at December 31, 2011 were comprised of twelve mortgage-backed securities, twelve corporate bonds and twenty-six SBA-backed securities. The losses above are on debt securities that have contractual maturity dates and are primarily related to market interest rates. All unrealized losses on investment securities are not considered to be other-than-temporary, because they are related to changes in interest rates, lack of liquidity and demand in the general investment market and do not affect the expected cash flows of the underlying collateral or the issuer. The Bank's mortgage-backed securities are all backed by government sponsored enterprises or agencies. The Bank does not own any private label mortgage-backed securities.

At March 31, 2012 and December 31, 2011, the balance of Federal Home Loan Bank ("FHLB") of Atlanta stock held by the Company was $4.3 million and $3.5 million, respectively. On March 28, 2012, FHLB paid a dividend for the fourth quarter of 2011 with an annualized rate of 1.23%. The dividend rate was equal to average three-month LIBOR for the period of October 1, 2011 to December 31, 2011 plus 0.75%, and was applicable to capital stock held during that period. Management believes that its investment in FHLB stock was not other-than-temporarily impaired as of March 31, 2012 or December 31, 2011. However, there can be no assurance that the impact of recent or future legislation on the Federal Home Loan Banks will not also cause a decrease in the value of the FHLB stock held by the Company.

The aggregate amortized cost and fair value of the available-for-sale securities portfolio at March 31, 2012 by remaining contractual maturity are as follows:


	Amortized Cost		Fair Value
	(Dollars in thousands)
Government-sponsored enterprises and FFCB bonds:
Due in one through five years	$	3	$	26
Obligations of states and political subdivisions:
Due in one year or less		150		151
Due in one through five years		960		1,027
Due in five through ten years		20,382		20,723
Due after ten years		11,708		11,885
Mortgage-backed securities:
Due in five through ten years		10,677		10,767
Due after ten years		114,107		115,145
SBA-backed securities:
Due in five through ten years		7,127		7,155
Due after ten years		144,750		145,180
Corporate bonds:
Due in one through five years		17,956		18,018
Due in five through ten years		19,296		18,733

Total securities	$	347,116	$	348,810

Securities with an amortized cost of $216.3 million at March 31, 2012 are pledged as collateral. Of this total, securities with an amortized cost of $64.0 million and fair value of $64.4 million are pledged as collateral for FHLB advances.

The aggregate amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2011 by remaining contractual maturity are as follows:


	Amortized Cost		Fair Value
	(Dollars in thousands)
Government-sponsored enterprises and FFCB bonds:
Due in one through five years	$	3	$	28
Due in five through ten years		1,000		1,004
Obligations of states and political subdivisions:
Due in one year or less		250		252
Due in one through five years		961		1,033
Due in five through ten years		11,768		12,083
Due after ten years		14,876		15,350
Mortgage-backed securities:
Due in five through ten years		7,415		7,490
Due after ten years		123,534		124,802
SBA-backed securities:
Due in five through ten years		2,967		3,007
Due after ten years		143,228		143,630
Corporate bonds:
Due in one year through five years		13,338		13,081
Due in five through ten years		19,345		17,690

Total securities	$	338,685	$	339,450

Securities with an amortized cost of $197.6 million at December 31, 2011 were pledged as collateral. Of this total, securities with an amortized cost of $47.4 million and fair value of $48.0 million were pledged as collateral for FHLB advances.