The Corporation's investment securities are classified as available-for-sale and held-to-maturity at September 30, 2012 and December 31, 2011. Investment securities available-for-sale are reported at fair value with unrealized gains or losses included in equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value at the balance sheet date. Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note 8 of the Notes to Consolidated Financial Statements for a further discussion.

Transfers of debt securities from the available-for-sale category to the held-to-maturity category are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer remains in accumulated other comprehensive income and in the carrying value of the held-to-maturity investment security. Premiums or discounts on investment securities are amortized or accreted using the effective interest method over the life of the security as an adjustment of yield. Unrealized holding gains or losses that remain in accumulated other comprehensive income are amortized or accreted over the remaining life of the security as an adjustment of yield, offsetting the related amortization of the premium or accretion of the discount.

The following tables present information related to the Corporation's investment securities at September 30, 2012 and December 31, 2011.


	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	20,571	$	111	$	(50	)	$	20,632
Federal agency obligations		27,928		514		(4	)		28,438
Residential mortgage-backed securities		57,695		1,804		—			59,499
Commercial mortgage-backed securities		9,734		267		—			10,001
Obligations of U.S. states and political subdivisions		91,037		5,222		(7	)		96,252
Trust preferred securities		18,113		118		(1,492	)		16,739
Corporate bonds and notes		228,865		8,262		(412	)		236,715
Asset-backed securities		19,609		253		—			19,862
Collateralized mortgage obligations		2,673		—		(736	)		1,937
Certificates of deposit		3,005		28		(6	)		3,027
Equity securities		635		7		(186	)		456
Other securities		15,994		68		(15	)		16,047
Total	$	495,859	$	16,654	$	(2,908	)	$	509,605


Investment Securities Held-to-Maturity:
Federal agency obligations	$	11,663	$	80	$	—				$	11,743
Commercial mortgage-backed securities		5,598		179		(9	)				5,768
Obligations of U.S. states and political subdivisions		39,242		4,193		—					43,435
Total	$	56,503	$	4,452	$	(9	)			$	60,946

Total investment securities	$	552,362	$	21,106	$	(2,917		)	$			570,551


	December 31, 2011
			Amortized Cost				Gross Unrealized Gains			Gross Unrealized Losses				Fair Value
				(in thousands)
Investment Securities Available-for-Sale:
Federal agency obligations		$			24,781	$		188	$		—		$		24,969
Residential mortgage-backed securities					113,213			2,157			(6	)			115,364
Obligations of U.S. states and political subdivisions					66,309			2,900			(36	)			69,173
Trust preferred securities					20,567			14			(4,394	)			16,187
Corporate bonds and notes					175,812			1,382			(4,077	)			173,117
Collateralized mortgage obligations					3,226			—			(1,327	)			1,899
Asset-backed securities					7,614			52			(13	)			7,653
Equity securities					535			—			(273	)			262
Other securities					5,882			21			(20	)			5,883
Total		$			417,939	$		6,714	$		(10,146	)	$		414,507
Investment Securities Held-to-Maturity:
Federal agency obligations		$			28,262	$		177	$		(34	)	$		28,405
Commercial mortgage-backed securities					6,276			—			(69	)			6,207
Obligations of U.S. states and political subdivisions					37,695			2,615			—				40,310
Total		$			72,233	$		2,792	$		(103	)	$		74,922
Total investment securities		$			490,172	$		9,506	$		(10,249	)	$		489,429

The following table presents information for investment securities available-for-sale at September 30, 2012, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.


	September 30, 2012
	Amortized Cost		Fair Value
Investment Securities Available-for-Sale :	(in thousands)
Due in one year or less	$	22,762	$	22,775
Due after one year through five years		108,756		111,597
Due after five years through ten years		138,074		143,806
Due after ten years		142,209		145,424
Residential mortgage-backed securities		57,695		59,499
Commercial mortgage-backed securities		9,734		10,001
Equity securities		635		456
Other securities		15,994		16,047
Total	$	495,859	$	509,605
Investment Securities Held-to-Maturity :
Due after five years through ten years	$	6,741	$	6,971
Due after ten years		44,164		48,207
Commercial mortgage-backed securities		5,598		5,768
Total	$	56,503	$	60,946

Total investment securities	$	552,362	$	570,551

During the nine months ended September 30, 2011, the Corporation reclassified at fair value approximately $66.8 million in available-for-sale investment securities to the held-to-maturity category. The related after-tax gains of approximately $166,000 remained in accumulated other comprehensive income and will be amortized over the remaining life of the securities as an adjustment of yield, offsetting the related amortization of the premium or accretion of the discount on the transferred securities. No gains or losses were recognized at the time of reclassification. Management considers the held-to-maturity classification of these investment securities to be appropriate as the Corporation has the positive intent and ability to hold these securities to maturity.

For the nine months ended September 30, 2012, proceeds of available for sale investment securities sold amounted to approximately $114.6 million. Gross realized gains on investment securities sold amounted to approximately $2.5 million, while gross realized losses amounted to approximately $332,000, which were impairment charges, for the period. For the nine months ended September 30, 2011, proceeds of investment securities sold amounted to approximately $236.4 million. Gross realized gains on investment securities sold amounted to approximately $3.2 million, while gross realized losses, which included impairment charges of $303,000, amounted to approximately $372,000 for the period.

Gross gains and losses from the sales of investment securities for the three and nine month periods ended September 30, 2012 and 2011 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2012		2011		2012		2011
Gross gains on sales of investment securities	$	897	$	1,316	$	2,545	$	3,189
Gross losses on sales of investment securities		—		—		—		69
Net gains on sales of investment securities	$	897	$	1,316	$	2,545	$	3,120

The following summarizes OTTI charges for the periods indicated.


	Nine Months Ended
	September 30,
	2012		2011
	(in thousands)
Other than temporary impairment charges	$	60	$	18
Principal losses on a variable rate CMO		272		285
Total other-than-temporary impairment charges	$	332	$	303

The Corporation performs regular analysis on all its investment securities to determine whether a decline in fair value indicates that an investment is other-than-temporarily impaired in accordance with FASB ASC 320-10. FASB ASC 320-10 requires companies to record OTTI charges, through earnings, if they have the intent to sell, or if it is more likely than not that they will be required to sell, an impaired debt security before recovery of its amortized cost basis. If the Corporation intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the investment's amortized cost basis and its estimated fair value at the balance sheet date. If the Corporation does not intend to sell the security and it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current period loss, and as such, it determines that a decline in fair value is other than temporary, the OTTI is separated into the amount representing the credit loss and the amount related to all other factors. The amount of the OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.