Note 6 - Investment Securities

9 Months Ended

Sep. 30, 2011

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

6.  Investment Securities

The following table summarizes the amortized costs and estimated fair value of the securities portfolio at September 30, 2011 and December 31, 2010. The summary is divided into available for sale and held to maturity investment securities.

	Amortized		Gross		Gross		Estimated
September 30, 2011 (In thousands)	Cost		Unrealized Gains		Unrealized Losses		Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	98,723	$	498	$	24	$	99,197
Obligations of states and political subdivisions		69,534		2,659		140		72,053
Mortgage-backed securities – residential		396,164		11,021		359		406,826
Mortgage-backed securities – commercial		213		8				221
U.S. Treasury securities		49						49
Money market mutual funds		299						299
Corporate debt securities		7,636				1,181		6,455
Equity securities		399						399
Total securities – available for sale	$	573,017	$	14,186	$	1,704	$	585,499
Held To Maturity
Obligations of states and political subdivisions	$	930	$	71	$	0	$	1,001

	Amortized		Gross		Gross		Estimated
December 31, 2010 (In thousands)	Cost		Unrealized Gains		Unrealized Losses		Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	42,103	$	58	$	548	$	41,613
Obligations of states and political subdivisions		75,004		923		1,128		74,799
Mortgage-backed securities – residential		314,799		7,527		2,396		319,930
U.S. Treasury securities		1,043		1				1,044
Money market mutual funds		145						145
Corporate debt securities		7,441				835		6,606
Equity securities		45						45
Total securities – available for sale	$	440,580	$	8,509	$	4,907	$	444,182
Held To Maturity
Obligations of states and political subdivisions	$	930	$	0	$	86	$	844

The amortized cost and estimated fair value of the securities portfolio at September 30, 2011, by contractual maturity, are detailed below. The summary is divided into available for sale and held to maturity securities. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Equity securities in the available for sale portfolio consist of investments attributed to the Company’s captive insurance subsidiary. These securities have no stated maturity and are not included in the maturity schedule that follows. Mortgage-backed securities are stated separately due to the nature of payment and prepayment characteristics of these securities, as principal is not due at a single date.

	Available For Sale				Held To Maturity
September 30, 2011 (In thousands)	Amortized  Cost		Estimated  Fair Value		Amortized  Cost		Estimated  Fair Value
Due in one year or less	$	11,365	$	11,330
Due after one year through five years		88,759		89,177
Due after five years through ten years		56,509		58,501
Due after ten years		19,608		19,045	$	930	$	1,001
Mortgage-backed securities		396,377		407,047
Total	$	572,618	$	585,100	$	930	$	1,001

Gross realized gains and losses on the sale of available for sale investment securities were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2011		2010		2011		2010
Gross realized gains	$	400	$	3,910	$	1,226	$	9,163
Gross realized losses		14		2		17		276
Net realized gains	$	386	$	3,908	$	1,209	$	8,887
Income tax provision related to net realized gains	$	135	$	1,368	$	423	$	3,110
Proceeds from sales and calls of available for sale investment securities	$	129,434	$	224,073	$	254,669	$	465,798

Investment securities with unrealized losses at September 30, 2011 and December 31, 2010 not recognized in income are presented in the tables below. The tables segregate investment securities that have been in a continuous unrealized loss position for less than twelve months from those that have been in a continuous unrealized loss position for twelve months or more. The tables also include the fair value of the related securities.

	Less than 12 Months				12 Months or More				Total
September 30, 2011 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	22,638	$	24					$	22,638	$	24
Obligations of states and political subdivisions		3,146		36	$	7,345	$	104		10,491		140
Mortgage-backed securities – residential		66,061		359						66,061		359
Corporate debt securities						4,652		1,181		4,652		1,181
Total	$	91,845	$	419	$	11,997	$	1,285	$	103,842	$	1,704

	Less than 12 Months				12 Months or More				Total
December 31, 2010 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	32,000	$	548					$	32,000	$	548
Obligations of states and political subdivisions		22,517		1,028	$	5,733	$	186		28,250		1,214
Mortgage-backed securities – residential		165,426		2,396						165,426		2,396
Corporate debt securities						4,989		835		4,989		835
Total	$	219,943	$	3,972	$	10,722	$	1,021	$	230,665	$	4,993

Unrealized losses included in the tables above have not been recognized in income since they have been identified as temporary. The Company evaluates investment securities for other-than-temporary impairment (“OTTI”) at least quarterly, and more frequently when economic or market conditions warrant. Many factors are considered, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was effected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an OTTI charge exists involves a high degree of subjectivity and judgment and is based on the information available to the Company at a point in time.

At September 30, 2011, the Company’s investment securities portfolio had gross unrealized losses of $1.7 million, a decrease of $3.3 million or 65.9% compared to year-end 2010. Of the total gross unrealized losses at September 30, 2011, $1.3 million or 75.4% relate to investments that have been in a continuous loss position for 12 months or more. Unrealized losses on corporate debt securities make up $1.2 million of the total unrealized loss on investment securities in a continuous loss position of 12 months or more.

Corporate debt securities in the Company’s investment securities portfolio at September 30, 2011 consist primarily of single-issuer trust preferred capital securities issued by a national and global financial services firm. Each of these securities is currently performing and the issuer of these securities continues to be rated as investment grade by major rating agencies. The unrealized loss on corporate debt securities is primarily attributed to the general decline in financial markets and illiquidity events that began in 2008 and is not due to adverse changes in the expected cash flows of the individual securities. Overall market declines, particularly of banking and financial institutions, are a result of significant stress throughout the regional and national economy that began during 2008 which has not fully stabilized. The first six months of 2011 showed overall improvement in the financial institution sector debt markets, with continued price appreciation in the Company’s corporate debt investment. However, increased volatility occurred during the third quarter of 2011 that resulted in price depreciation associated with continuing domestic and global economic pressures.

The Company attributes the unrealized losses in other sectors of its investment securities portfolio to changes in market interest rates. In general, market rates for these securities exceed the yield available at the time many of the securities in the portfolio were purchased. The Company does not expect to incur a loss on these securities unless they are sold prior to maturity. The Company’s current intent is to hold these securities until recovery.

Investment securities with unrealized losses at September 30, 2011 are performing according to their contractual terms. The Company does not have the intent to sell these securities and likely will not be required to sell these securities before their anticipated recovery. The Company does not consider any of the securities to be impaired due to reasons of credit quality or other factors.

Investment securities with a carrying value of $333 million and $301 million at September 30, 2011 and December 31, 2010, respectively, were pledged to secure public and trust deposits, repurchase agreements, and for other purposes.