Securities Available for Sale

12 Months Ended

Dec. 31, 2011

Securities Available for Sale [Abstract]

SECURITIES AVAILABLE FOR SALE

NOTE 2—SECURITIES AVAILABLE FOR SALE

The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2011 and 2010 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

		September 30,		September 30,		September 30,			September 30,
2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and U.S. government sponsored entities	$	53,689	$	2,300	$	(1	)	$	55,988
State and political subdivisions		78,288		4,446		(44	)		82,690
Corporate bonds		758		11		0			769
Mortgage-backed securities—residential		217,644		5,384		(310	)		222,718
Collateralized mortgage obligations		36,806		416		0			37,222
Small business administration		318		1		(4	)		315
Equity securities		139		194		(6	)		327
Totals	$	387,642	$	12,752	$	(365	)	$	400,029

		September 30,		September 30,		September 30,			September 30,
2010	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and U.S. government sponsored entities	$	66,968	$	2,767	$	(160	)	$	69,575
State and political subdivisions		81,397		1,215		(2,146	)		80,466
Corporate bonds		250		17		0			267
Mortgage-backed securities—residential		140,681		4,099		(1,003	)		143,777
Collateralized mortgage obligations		20,021		1		(362	)		19,660
Small business administration		408		1		(6	)		403
Equity securities		149		66		(16	)		199
Totals	$	309,874	$	8,166	$	(3,693	)	$	314,347

The proceeds from sales of available-for-sale securities and the associated gains and losses were as follows:

		September 30,		September 30,			September 30,
	2011		2010			2009
Proceeds	$	50,952	$	69,383		$	26,185
Gross gains		1,804		2,685			1,019
Gross losses		0		(5	)		(2	)

The tax provision related to these net realized gains was $631 thousand, $938 thousand, and $356 thousand respectively.

The amortized cost and fair value of the debt securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date and are shown separately.

		September 30,		September 30,
	December 31, 2011
Available for sale	Amortized Cost		Fair Value
Maturity
Within one year	$	13,999	$	14,262
One to five years		67,978		71,613
Five to ten years		33,719		35,364
Beyond ten years		17,039		18,208
Mortgage-backed securities, collateralized mortgage obligations and small business administration		254,768		260,255
Totals	$	387,503	$	399,702

Securities with a carrying amount of $194 million at December 31, 2011 and $182 million at December 31, 2010 were pledged to secure public deposits and repurchase agreements. The Trust company had securities, with a carrying amount of $100 thousand, at year-end 2011 and 2010, pledged to qualify as a fiduciary in the State of Ohio.

In each year, there were no holdings of any other issuer that exceeded 10% of stockholders' equity, other than the U.S. Government and its agencies.

The following table summarizes the investment securities with unrealized losses at December 31, 2011 and December 31, 2010 aggregated by major security type and length of time in a continuous unrealized loss position:

2011

		September 30,		September 30,			September 30,		September 30,			September 30,		September 30,
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government sponsored entities	$	249	$	(1	)	$	0	$	0			249		(1	)
State and political subdivisions		0		0			2,420		(44	)		2,420		(44	)
Corporate bonds		507		0			0		0			507		0
Mortgage-backed securities—residential		43,426		(203	)		9,652		(107	)		53,078		(310	)
Small business administration		0		0			233		(4	)		233		(4	)
Equity securities		0		0			7		(6	)		7		(6	)
Total temporarily impaired	$	44,182	$	(204	)	$	12,312	$	(161	)	$	56,494	$	(365	)

2010

		September 30,		September 30,			September 30,		September 30,			September 30,		September 30,
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government sponsored entities	$	8,458	$	(160	)	$	0	$	0		$	8,458	$	(160	)
State and political subdivisions		36,118		(1,981	)		790		(165	)		36,908		(2,146	)
Mortgage-backed securities—residential		45,567		(1,002	)		26		(1	)		45,593		(1,003	)
Collateralized mortgage obligations		19,594		(362	)		0		0			19,594		(362	)
Small business administration		0		0			313		(6	)		313		(6	)
Equity securities		0		0			8		(16	)		8		(16	)
Total temporarily impaired	$	109,737	$	(3,505	)	$	1,137	$	(188	)	$	110,874	$	(3,693	)

The Company’s equity securities include local and regional bank holdings. The Company recognized a $11 thousand pre-tax and a $74 thousand pre-tax charge for the other-than-temporary decline in fair value on its equity holdings, during the years ended December 31, 2011 and 2009, respectively. When a decline in fair value below cost is deemed to be other-than-temporary, the difference between the amortized cost basis of the equity security and its fair value must be recognized as a charge to earnings. No other-than-temporary impairment was recognized for the year ended December 31, 2010.

As of December 31, 2011, the Company’s security portfolio consisted of 412 securities, 33 of which were in an unrealized loss position. The majority of unrealized losses are related to the Company’s holdings in mortgage-backed securities-residential and securities issued by state and political subdivisions, as discussed below:

Mortgage-backed securities-residential

All of the Company’s holdings of mortgage-backed securities-residential at year end 2011 and 2010 were issued by U.S. Government sponsored enterprises. Unrealized losses on mortgage-backed securities-residential have not been recognized into income. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities-residential and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2011.

Securities issued by State and Political subdivisions

Unrealized losses on debt securities issued by state and political subdivisions have not been recognized into income. Generally these securities have maintained their investment grade ratings and management does not have the intent to sell these securities before their anticipated recovery. The fair value is expected to recover as the securities approach their maturity date.