Investment Securities

6 Months Ended

Jun. 30, 2011

Investment Securities [Abstract]

Investment Securities

Note 3 — Investment Securities

The amortized cost and estimated fair values of investments in debt and equity securities are summarized in the following tables:

	June 30, 2011
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
			(in thousands)
Securities Available-for-Sale
Obligations of U.S. government corporations and agencies	$	242,914	$	9,918		—		$	252,832
Obligations of states and political subdivisions		11,840		395		(75	)		12,160
Total securities available-for-sale	$	254,754	$	10,313	$	(75	)	$	264,992

	December 31, 2010
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
			(in thousands)
Securities Available-for-Sale
Obligations of U.S. government corporations and agencies	$	255,884	$	8,623	$	(326	)	$	264,181
Obligations of states and political subdivisions		12,452		141		(52	)		12,541
Corporate debt securities		1,000		—		(451	)		549
Total securities available-for-sale	$	269,336	$	8,764	$	(829	)	$	277,271

No investment securities were sold during the six months ended June 30, 2011 or the year ended December 31, 2010. Investment securities with an aggregate carrying value of $121,308,000 and $140,100,000 at June 30, 2011 and December 31, 2010, respectively, were pledged as collateral for specific borrowings, lines of credit and local agency deposits.

The amortized cost and estimated fair value of debt securities at June 30, 2011 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2011, obligations of U.S. government corporations and agencies with a cost basis totaling $242,914,000 consist almost entirely of mortgage-backed securities whose contractual maturity, or principal repayment, will follow the repayment of the underlying mortgages. For purposes of the following table, the entire outstanding balance of these mortgage-backed securities issued by U.S. government corporations and agencies is categorized based on final maturity date. At June 30, 2011, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S. government corporations and agencies to be approximately 3.3 years. Average remaining life is defined as the time span after which the principal balance has been reduced by half.

	Amortized		Estimated
	Cost		Fair Value
	(in thousands)
Investment Securities
Due in one year	$	22	$	22
Due after one year through five years		25,176		26,336
Due after five years through ten years		75,073		76,535
Due after ten years		154,483		162,099
Totals	$	254,754	$	264,992

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	Less than 12 months					12 months or more				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	Value		Loss			Value		Loss		Value		Loss
June 30, 2011						(in thousands)
Securities Available-for-Sale:
Obligations of U.S. government corporations and agencies	$	11		—			—		—	$	11		—
Obligations of states and political subdivisions		1,649		(75	)		—		—		1,649		(75	)
Total securities available-for-sale	$	1,660	$	(75	)		—		—	$	1,660	$	(75	)

	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2010						(in thousands)
Securities Available-for-Sale:
Obligations of U.S. government corporations and agencies	$	54,760	$	(326	)		—		—		$	54,760	$	(326	)
Obligations of states and political subdivisions		1,345		(22	)		513		(30	)		1,858		(52	)
Corporate debt securities		—		—			549		(451	)		549		(451	)
Total securities available-for-sale	$	56,105	$	(348	)	$	1,062	$	(481	)	$	57,167	$	(829	)

Obligations of U.S. government corporations and agencies: Unrealized losses on investments in obligations of U.S. government corporations and agencies are caused by interest rate increases. The contractual cash flows of these securities are guaranteed by U.S. Government Sponsored Entities (principally Fannie Mae and Freddie Mac). It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At June 30, 2011, one debt securities representing obligations of U.S. government corporations and agencies had an unrealized loss with aggregate depreciation of 0.03% from the Company’s amortized cost basis.

Obligations of states and political subdivisions: The unrealized losses on investments in obligations of states and political subdivisions are caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At June 30, 2011, three debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of 4.35% from the Company’s amortized cost basis.

Corporate debt securities: The unrealized losses on investments in corporate debt securities were caused by increases in required yields by investors in similar types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At June 30, 2011, the Company had no corporate debt securities.