Securities

9 Months Ended

Sep. 30, 2011

Securities [Abstract]

SECURITIES

NOTE H: SECURITIES

The amortized cost and fair value of securities available for sale and held for investment at September 30, 2011 and December 31, 2010 are summarized as follows:

	September 30, 2011
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	4,197	$	29	$	—		$	4,226
Mortgage-backed securities of U.S Government Sponsored Entities		145,866		2,701		(12	)		148,555
Collateralized mortgage obligations of U.S. Government Sponsored Entities		367,293		12,948		—			380,241
Private collateralized mortgage obligations		76,810		387		(2,904	)		74,293
Obligations of state and political subdivisions		1,097		61		—			1,158
Other		2,722		—		—			2,722
	$	597,985	$	16,126	$	(2,916	)	$	611,195

SECURITIES HELD FOR INVESTMENT
Collateralized mortgage obligations of U.S. Government Sponsored Entities	$	13,978	$	—	$	(107	)	$	13,871
Private collateralized mortgage obligations		2,139		27		—			2,166
Obligations of state and political subdivisions		7,458		533		(9	)		7,982
Other		1,000		—		—			1,000
	$	24,575	$	560	$	(116	)	$	25,019
	December 31, 2010
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	4,192	$	20	$	—		$	4,212
Mortgage-backed securities of Government Sponsored Entities		120,439		1,218		(1,023	)		120,634
Collateralized mortgage obligations of Government Sponsored Entities		212,715		4,101		(1,357	)		215,459
Private collateralized mortgage obligations		90,428		1,325		(1,369	)		90,384
Obligations of state and political subdivisions		1,638		71		—			1,709
Other		2,742		—		—			2,742
	$	432,154	$	6,735	$	(3,749	)	$	435,140
SECURITIES HELD FOR INVESTMENT
Collateralized mortgage obligations of Government Sponsored Entities	$	15,423	$	85	$	—		$	15,508
Private collateralized mortgage obligations		3,540		79		—			3,619
Obligations of state and political subdivisions		7,398		69		(244	)		7,223
Other		500		3		—			503
	$	26,861	$	236	$	(244	)	$	26,853

Proceeds from sales of securities during the nine month period ended September 30, 2011 were $33,555,000, with gross gains of $153,000 and gross losses of $16,000. Proceeds from sales of securities available for sale for the nine month period ended September 30, 2010 were $107,521,000, with gross gains of $3,687,000 and no losses.

Securities with a carrying value of $205,378,000 and $328,554,000 and a fair value of $205,385,000 and $328,648,000 at September 30, 2011 and December 31, 2010, respectively, were pledged as collateral for repurchase agreements, United States Treasury deposits, and other public and trust deposits.

The amortized cost and fair value of securities at September 30, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties.

	Held for Investment				Available for Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Due in less than one year	$	—	$	—	$	2,498	$	2,500
Due after one year through five years		153		150		1,699		1,726
Due after five years through ten years		2,273		2,393		1,097		1,158
Due after ten years		5,032		5,439		—		—
		7,458		7,982		5,294		5,384
Mortgage-backed securities of Government Sponsored Entities		—		—		145,866		148,555
Collateralized mortgage obligations of Government Sponsored Entities		13,978		13,871		367,293		380,241
Private collateralized mortgage obligations		2,139		2,166		76,810		74,293
No contractual maturity		1,000		1,000		2,722		2,722
	$	24,575	$	25,019	$	597,985	$	611,195

The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flows analyses, using observable market data where available. The tables below indicate the amount of securities with unrealized losses and period of time for which these losses were outstanding at September 30, 2011 and December 31, 2010, respectively.

	September 30, 2011
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of U.S. Government Sponsored Entities	$	9,281	$	(12	)	$	—	$	—		$	9,281	$	(12	)
Collateralized mortgage obligations of U.S. Government Sponsored Entities		13,871		(107	)		—		—			13,871		(107	)
Private collateralized mortgage obligations		44,536		(1,760	)		18,806		(1,144	)		63,342		(2,904	)
Obligations of state and political subdivisions		914		(9	)		—		—			914		(9	)
Total temporarily impaired securities	$	68,602	$	(1,888	)	$	18,806	$	(1,144	)	$	87,408	$	(3,032	)

	December 31, 2010
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Mortgage-backed securities of U.S. Government Sponsored Entities	$	61,176	$	(1,023	)	$	—	$	—		$	61,176	$	(1,023	)
Collateralized mortgage obligations of U.S. Government Sponsored Entities		42,469		(1,357	)		—		—			42,469		(1,357	)
Private collateralized mortgage obligations		42,289		(631	)		14,214		(738	)		56,503		(1,369	)
Obligations of state and political subdivisions		4,273		(244	)		—		—			4,273		(244	)
Total temporarily impaired securities	$	150,207	$	(3,255	)	$	14,214	$	(738	)	$	164,421	$	(3,993	)

The Company owned individual investment securities totaling $87.4 million with aggregate gross unrealized losses at September 30, 2011. Based on a review of each of the securities in the investment securities portfolio at September 30, 2011, the Company concluded that it expected to recover the amortized cost basis of its investment.

Approximately $2.9 million of the unrealized losses at September 30, 2011 pertain to private label securities secured by collateral originated in 2005 and prior with a fair value of $63.3 million and were attributable to a combination of factors, including relative changes in interest rates since the time of purchase and decreased liquidity for investment securities in general. The collateral underlying these mortgage investments are 30- and 15-year fixed and 10/1 adjustable rate mortgages loans with low loan to values, subordination and historically have had minimal foreclosures and losses. Based on its assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality.

At September 30, 2011, the Company also had $119,000 of unrealized losses on mortgage-backed securities of government sponsored entities having a fair value of $23.2 million that were attributable to a combination of factors, including relative changes in interest rates since the time of purchase and decreased liquidity for investment securities in general. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Based on its assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

The unrealized losses on debt securities issued by states and political subdivisions amounted to $9,000 at September 30, 2011. The unrealized losses on state and municipal holdings included in this analysis are attributable to a combination of factors, including a general decrease in liquidity and an increase in risk premiums for credit-sensitive securities since the time of purchase. Based on its assessment of these factors, management believes that unrealized losses on these debt security holdings are a function of changes in investment spreads and liquidity and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

As of September 30, 2011, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its investment securities that have losses. Therefore, management does not consider any investment to be other-than-temporarily impaired at September 30, 2011.

Included in other assets was $12.2 million at September 30, 2011 of Federal Home Loan Bank and Federal Reserve Bank stock stated at par value. At September 30, 2011, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $12.2 million of cost method investment securities.