Securities

6 Months Ended

12 Months Ended

Jun. 30, 2013

Dec. 31, 2012

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, 2013 and December 31, 2012, were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Securities Available-for-Sale:	Cost		Gains		Losses		Value

June 30, 2013
U.S. Treasury and Agency Securities	$	23,257	$	22	$	(918)	$	22,361
Obligations of State and Political Subdivisions		76,710		2,585		(530)		78,765
Mortgage-backed Securities - Residential		513,751		5,624		(8,696)		510,679
Equity Securities		684		80		—		764
Total	$	614,402	$	8,311	$	(10,144)	$	612,569

December 31, 2012
U.S. Treasury and Agency Securities	$	23,570	$	40	$	(138)	$	23,472
Obligations of State and Political Subdivisions		71,352		5,145		(12)		76,485
Mortgage-backed Securities - Residential		475,452		11,505		(45)		486,912
Equity Securities		684		49		—		733
Total	$	571,058	$	16,739	$	(195)	$	587,602

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, 2013 and December 31, 2012, were as follows:

			Gross		Gross
	Carrying		Unrecognized		Unrecognized		Fair
Securities Held-to-Maturity:	Amount		Gains		Losses		Value

June 30, 2013
Obligations of State and Political Subdivisions	$	268	$	3	$	—	$	271

December 31, 2012
Obligations of State and Political Subdivisions	$	346	$	5	$	—	$	351

The amortized cost and fair value of Securities at June 30, 2013 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
Securities Available-for-Sale:	Cost		Value
Due in one year or less	$	4,582	$	4,616
Due after one year through five years		12,828		13,138
Due after five years through ten years		55,349		55,605
Due after ten years		27,208		27,767
Mortgage-backed Securities - Residential		513,751		510,679
Equity Securities		684		764
Totals	$	614,402	$	612,569

	Carrying		Fair
Securities Held-to-Maturity:	Amount		Value

Due in one year or less	$	—	$	—
Due after one year through five years		268		271
Due after five years through ten years		—		—
Due after ten years		—		—
Totals	$	268	$	271

Proceeds from the sales of Available-for-Sale Securities are summarized below:

	Three Months		Three Months
	Ended		Ended
	June 30, 2013		June 30, 2012

Proceeds from Sales and Calls	$	25,972	$	9,247
Gross Gains on Sales and Calls		467		76
Income Taxes on Gross Gains		163		27

	Six Months		Six Months
	Ended		Ended
	June 30, 2013		June 30, 2012
Proceeds from Sales and Calls	$	100,721	$	51,395
Gross Gains on Sales and Calls		1,080		94
Income Taxes on Gross Gains		378		33

Below is a summary of securities with unrealized losses as of June 30, 2013 and December 31, 2012, 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
June 30, 2013
U.S. Treasury and Agency Securities	$	19,082	$	(918)	$	—	$	—	$	19,082	$	(918)
Obligations of State and Political Subdivisions		15,329		(530)		—		—		15,329		(530)
Mortgage-backed Securities - Residential		286,907		(8,696)		—		—		286,907		(8,696)
Equity Securities		—		—		—		—		—		—
Total	$	321,318	$	(10,144)	$	—	$	—	$	321,318	$	(10,144)

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
December 31, 2012
U.S. Treasury and Agency Securities	$	19,862	$	(138)	$	—	$	—	$	19,862	$	(138)
Obligations of State and Political Subdivisions		1,042		(12)		—		—		1,042		(12)
Mortgage-backed Securities - Residential		18,323		(45)		—		—		18,323		(45)
Equity Securities		—		—		—		—		—		—
Total	$	39,227	$	(195)	$	—	$	—	$	39,227	$	(195)

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.

NOTE 2 – Securities

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

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Securities Available-for-Sale:	Cost		Gains		Losses		Value

2012
U.S. Treasury and Agency Securities	$	23,570	$	40	$	(138)	$	23,472
Corporate Securities		—		—		—		—
Obligations of State and Political Subdivisions		71,352		5,145		(12)		76,485
Mortgage-backed Securities - Residential		475,452		11,505		(45)		486,912
Equity Securities		684		49		—		733
Total	$	571,058	$	16,739	$	(195)	$	587,602

2011
U.S. Treasury and Agency Securities	$	6,340	$	82	$	—	$	6,422
Corporate Securities		1,003		2		—		1,005
Obligations of State and Political Subdivisions		60,606		4,195		(2)		64,799
Mortgage-backed Securities - Residential		431,495		12,529		(90)		443,934
Equity Securities		684		—		—		684
Total	$	500,128	$	16,808	$	(92)	$	516,844

The carrying amount, unrecognized gains and losses and fair value of Securities Held-to-Maturity were as follows:

			Gross		Gross
Securities Held-to-Maturity:	Carrying		Unrecognized		Unrecognized		Fair
	Amount		Gains		Losses		Value
2012
Obligations of State and Political Subdivisions	$	346	$	5	$	—	$	351

2011
Obligations of State and Political Subdivisions	$	690	$	7	$	—	$	697

The amortized cost and fair value of Securities at December 31, 2012 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	$	3,145	$	3,162
Due after one year through five years		13,191		13,570
Due after five years through ten years		51,937		54,239
Due after ten years		26,649		28,986
Mortgage-backed Securities - Residential		475,452		486,912
Equity Securities		684		733
Total	$	571,058	$	587,602

	Carrying		Fair
	Amount		Value
Securities Held-to-Maturity:
Due in one year or less	$	—	$	—
Due after one year through five years		346		351
Due after five years through ten years		—		—
Due after ten years		—		—
Total	$	346	$	351

Proceeds from the Sales of Securities are summarized below:

	2012		2011		2010
	Available-		Available-		Available-
	for-Sale		for-Sale		for-Sale

Proceeds from Sales and Calls	$	92,344	$	20,061	$	—
Gross Gains on Sales and Calls		1,667		2,089		—

Income Taxes on Gross Gains		583		721		—

The Company held a minority interest in American Community Bancorp, Inc., prior to the acquisition on January 1, 2011. For the year ended December 31, 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 year ended December 31, 2010.

The carrying value of securities pledged to secure repurchase agreements, public and trust deposits, and for other purposes as required by law was $61,744 and $70,718 as of December 31, 2012 and 2011, respectively.

Below is a summary of securities with unrealized losses as of year-end 2012 and 2011, presented by length of time the securities have been in a continuous unrealized loss position:

At December 31, 2012:	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss

U.S. Treasury and Agency Securities	$	19,862	$	(138)	$	—	$	—	$	19,862	$	(138)
Corporate Securities		—		—		—		—		—		—
Obligations of State and Political Subdivisions		1,042		(12)		—		—		1,042		(12)
Mortgage-backed Securities - Residential		18,323		(45)		—		—		18,323		(45)
Equity Securities		—		—		—		—		—		—
Total	$	39,227	$	(195)	$	—	$	—	$	39,227	$	(195)

At December 31, 2011:	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss

U.S. Treasury and Agency Securities	$	—	$	—	$	—	$	—	$	—	$	—
Corporate Securities		—		—		—		—		—		—
Obligations of State and Political Subdivisions		203		(2)		—		—		203		(2)
Mortgage-backed Securities - Residential		39,947		(90)		—		—		39,947		(90)
Equity Securities		—		—		—		—		—		—
Total	$	40,150	$	(92)	$	—	$	—	$	40,150	$	(92)

The Company’s equity securities consist of non-controlling investments in other banking organizations. When a decline in fair value below cost is deemed to be other-than-temporary, the unrealized loss must be recognized as a charge to earnings. At December 31, 2012 and 2011, none of the Company’s equity securities had an unrealized loss.

As a result of an evaluation of the Company’s equity securities portfolio as of December 31, 2011, the Company recognized a $110 pre-tax charge for an other-than-temporary decline in fair value of this portfolio. Accordingly, the other-than-temporary impairment was recognized in the consolidated statement of income and comprehensive income as part of Net Gain (Loss) on Securities during 2011.