Note 2 - Investment Securities

12 Months Ended

Dec. 31, 2011

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

2.  Investment Securities

The following tables summarize the amortized cost and estimated fair values of the securities portfolio at December 31, 2011 and 2010 and the corresponding amounts of gross unrealized gains and losses.  The summary is divided into available for sale and held to maturity securities.

December 31, 2011 (In thousands)	Amortized  Cost		Gross Unrealized  Gains		Gross Unrealized  Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	95,770	$	408	$	15	$	96,163
Obligations of states and political subdivisions		80,801		3,903		85		84,619
Mortgage-backed securities – residential		397,675		11,384		196		408,863
Mortgage-backed securities –commercial		203		6				209
Corporate debt securities		7,901				1,537		6,364
Mutual funds and equity securities		1,601						1,601
Total securities – available for sale	$	583,951	$	15,701	$	1,833	$	597,819
Held To Maturity
Obligations of states and political subdivisions	$	875	$	99	$	0	$	974

December 31, 2010 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross  Unrealized Losses		Estimated 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
Corporate debt securities		7,441				835		6,606
Mutual funds and equity securities		190						190
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

At year-end 2011 and 2010, the Company held no investment securities of any single issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The amortized cost and estimated fair value of the securities portfolio at December 31, 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. Mutual funds and equity securities in the available for sale portfolio at December 31, 2011 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
December 31, 2011 (In thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	11,997	$	11,973
Due after one year through five years		97,422		97,910
Due after five years through ten years		58,307		61,393
Due after ten years		16,746		15,870	$	875	$	974
Mortgage-backed securities		397,878		409,072
Total	$	582,350	$	596,218	$	875	$	974

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

(In thousands)	2011		2010		2009
Gross realized gains	$	1,529	$	9,166	$	3,560
Gross realized losses		174		277		72
Net realized gain	$	1,355	$	8,889	$	3,488
Income tax provision related to net realized gain	$	474	$	3,111	$	1,221
Proceeds from sales and calls of available for sale investment securities	$	380,711	$	548,551	$	314,623

Investment securities with a carrying value of $334 million and $301 million at December 31, 2011 and 2010 were pledged to secure public and trust deposits, repurchase agreements, and for other purposes.

Investment securities with unrealized losses at year-end 2011 and 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 table also includes the fair value of the related securities.

	Less than 12 Months				12 Months or More				Total
December 31, 2011 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	13,494	$	15					$	13,494	$	15
Obligations of states and political subdivisions		2,913		20	$	6,886	$	65		9,799		85
Mortgage-backed securities – residential		56,249		196						56,249		196
Corporate debt securities						4,299		1,537		4,299		1,537
Total	$	72,656	$	231	$	11,185	$	1,602	$	83,841	$	1,833

	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 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 December 31, 2011, the Company’s investment securities portfolio had gross unrealized losses of $1.8 million, a decrease of $3.1 million or 62.6% compared to year-end 2010. Of the total gross unrealized losses at December 31, 2011, $1.6 million or 87.4% relate to investments that have been in a continuous loss position for 12 months or more. Unrealized losses on corporate debt securities make up $1.5 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 December 31, 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 second half of 2011 that resulted in price depreciation associated with continuing domestic and global economic pressures. The Company considers the price depreciation to be indicative of the overall market for financial institution issues and not due to adverse changes in the expected cash flows of the individual securities.

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 December 31, 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.