Note 3 – Securities

The amortized cost, unrealized gross gains and losses recognized in accumulated other comprehensive income (loss), and fair value of Securities Available-for-Sale at June 30, 2011 and December 31, 2010, were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
Securities Available-for-Sale:	Cost		Gains		Losses			Value
June 30, 2011
U.S. Treasury and Agency Securities	$	21,844	$	228	$	—		$	22,072
Corporate Securities		1,009		1		—			1,010
Obligations of State and Political Subdivisions		45,237		2,035		(40	)		47,232
Mortgage-backed Securities - Residential		399,819		14,571		(15	)		414,375
Equity Securities		794		—		(97	)		697
Total	$	468,703	$	16,835	$	(152	)	$	485,386
December 31, 2010
U.S. Treasury and Agency Securities	$	—	$	—	$	—		$	—
Corporate Securities		—		—		—			—
Obligations of State and Political Subdivisions		31,483		813		(118	)		32,178
Mortgage-backed Securities - Residential		304,935		7,614		(1,483	)		311,066
Equity Securities		2,418		1,085		—			3,503
Total	$	338,836	$	9,512	$	(1,601	)	$	346,747

Equity securities that do not have readily determinable fair values are included in the above totals, are carried at historical cost and are evaluated for impairment on a periodic basis. All mortgage-backed securities in the above table are residential mortgage-backed securities and guaranteed by government sponsored entities.

The carrying amount, unrecognized gains and losses and fair value of Securities Held-to-Maturity at June 30, 2011 and December 31, 2010, were as follows:

			Gross		Gross
Securities Held-to-Maturity:	Carrying		Unrecognized		Unrecognized		Fair
	Amount		Gains		Losses		Value
June 30, 2011
Obligations of State and Political Subdivisions	$	1,444	$	10	$	—	$	1,454

December 31, 2010
Obligations of State and Political Subdivisions	$	1,604	$	9	$	—	$	1,613

The amortized cost and fair value of Securities at June 30, 2011 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay certain obligations with or without call or prepayment penalties. Mortgage-backed and Equity Securities are not due at a single maturity date and are shown separately.

	Amortized		Fair
	Cost		Value
Securities Available-for-Sale:
Due in one year or less	$	1,409	$	1,412
Due after one year through five years		22,836		23,305
Due after five years through ten years		14,482		14,898
Due after ten years		29,363		30,699
Mortgage-backed Securities - Residential		399,819		414,375
Equity Securities		794		697
Totals	$	468,703	$	485,386

	Carrying		Fair
	Amount		Value
Securities Held-to-Maturity:
Due in one year or less	$	170	$	170
Due after one year through five years		719		727
Due after five years through ten years		555		557
Due after ten years		—		—
Totals	$	1,444	$	1,454

Below is a summary of securities with unrealized losses as of June 30, 2011 and December 31, 2010, presented by length of time the securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	Value		Loss			Value		Loss		Value		Loss
At June 30, 2011:
U.S. Treasury and Agency Securities	$	—	$	—		$	—	$	—	$	—	$	—
Corporate Securities		—		—			—		—		—		—
Obligations of State and Political Subdivisions		1,384		(40	)		—		—		1,384		(40	)
Mortgage-backed Securities - Residential		7,906		(15	)		—		—		7,906		(15	)
Equity Securities		697		(97	)		—		—		697		(97	)
Total	$	9,987	$	(152	)	$	—	$	—	$	9,987	$	(152	)

	Less than 12 Months					12 Months or More				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	Value		Loss			Value		Loss		Value		Loss
At December 31, 2010:
U.S. Treasury and Agency Securities	$	—	$	—		$	—	$	—	$	—	$	—
Corporate Securities		—		—			—		—		—		—
Obligations of State and Political Subdivisions		5,175		(118	)		—		—		5,175		(118	)
Mortgage-backed Securities - Residential		70,123		(1,483	)		—		—		70,123		(1,483	)
Equity Securities		—		—			—		—		—		—
Total	$	75,298	$	(1,601	)	$	—	$	—	$	75,298	$	(1,601	)

Securities are written down to fair value when a decline in fair value is not considered temporary. In estimating other-than-temporary losses, management considers many factors, 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 affected 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 Company doesn’t intend to sell or expect to be required to sell these securities, and the decline in fair value is largely due to changes in market interest rates, therefore, the Company does not consider these securities to be other-than-temporarily impaired. All mortgage-backed securities in the Company’s portfolio are guaranteed by government sponsored entities, are investment grade, and are performing as expected.

The Company held a minority interest in American Community Bancorp, Inc., prior to the acquisition on January 1, 2011 (see Note 9 for further discussion). For the six months ended June 30, 2011, the Company recognized a gain of $1.045 million on the stock held of American Community Bancorp, Inc. as a result of the acquisition. No gains or losses were recognized during the three months ended June 30, 2011. No gains or losses were recognized during the quarter or six months ended June 30, 2010.