Securities

9 Months Ended

Sep. 30, 2011

NOTE 3 — SECURITIES

Due to the Bank Merger, the Company reported no investment securities on its Consolidated Balance Sheet as of September 30, 2011 (Successor). Investment securities as of December 31, 2010 (Predecessor) are summarized as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value

Available for Sale
December 31, 2010
U.S. government agencies	$	84,106	$	115	$	(922	)	$	83,299
States and political subdivisions		31,192		705		(396	)		31,501
CMO Agency		62,589		1,858		(265	)		64,182
CMO Non-Agency		3,454		43		(104	)		3,393
Mortgage-backed securities		17,168		815		(19	)		17,964
Trust preferred securities		1,850		—		(187	)		1,663


	$	200,359	$	3,536	$	(1,893	)	$	202,002


Held to Maturity

December 31, 2010
States and political subdivisions	$	215	$	1	$	—		$	216
Other securities		250		1		—			251


	$	465	$	2	$	—		$	467

For the Predecessor periods from July 1, 2011 to September 7, 2011, and from January 1, 2011 to September 30, 2011, there were realized gross gains of $6,324 from sales of investment securities.

There were no realized gross gains or (losses) from sales of investment securities for the three and nine month Predecessor periods ended September 30, 2010.

Securities with a carrying value of $135,692 at December 31, 2010 were pledged for public deposits, securities sold under agreements to repurchase and to the Federal Reserve Bank. The balance of pledged securities in excess of the pledging requirements was $7,983 at December 31, 2010, respectively.

Securities with unrealized losses at December 31, 2010 are as follows:


	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss

December 31, 2010
U. S. government agencies	$	65,178	$	(922	)	$	—	$	—		$	65,178	$	(922	)
States and political subdivisions		2,488		(114	)		1,659		(282	)		4,147		(396	)
CMO Agency		14,666		(265	)		—		—			14,666		(265	)
CMO Non-Agency		—		—			2,699		(104	)		2,699		(104	)
Mortgage-backed securities		2,821		(17	)		8		(2	)		2,829		(19	)
Trust preferred securities		—		—			1,663		(187	)		1,663		(187	)

Total temporarily impaired	$	85,153	$	(1,318	)	$	6,029	$	(575	)	$	91,182	$	(1,893	)

The Predecessor Company reviewed its investment portfolio on a quarterly basis judging each investment for other-than-temporary impairment (“OTTI”). Management did not have the intent to sell any of the temporarily impaired investments and believes it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The OTTI analysis focuses on the duration and amount a security is below book value and assesses a calculation for both a credit loss and a non-credit loss for each measured security considering the security’s type, performance, underlying collateral, and any current or potential debt rating changes. The OTTI calculation for credit loss is reflected in the income statement while the non-credit loss is reflected in other comprehensive income (loss).

The Predecessor Company held a single issue trust preferred security issued by a privately held bank holding company. The bank holding company deferred its interest payments beginning in the second quarter of 2009, and we have placed the security on non-accrual. The Federal Reserve Bank of St. Louis entered into an agreement with the bank holding company on October 22, 2009 which was made public on October 30, 2009. Among other provisions of the regulatory agreement, the bank holding company must strengthen its management of operations, strengthen its credit risk management practices, and submit a capital plan. As of September 7, 2011 no other communications between the bank holding company and the Federal Reserve Bank of St. Louis have been made public. Our estimated fair value implies an unrealized loss of $199, related primarily to illiquidity. The Company did not recognize other-than-temporary impairment on the security for the periods from January 1 to September 7, 2011 or July 1 to September 7, 2011.

The Predecessor Company held a private label class A21 collateralized mortgage obligation that was analyzed for the period ending September 7, 2011. The security’s estimated fair value implies an unrealized loss of $74. The Company did not recognize a write-down through non-interest income representing other-than-temporary impairment on the security for the periods from January 1 to September 7, 2011 or July 1 to September 7, 2011.

The following table presents a roll-forward of the cumulative amount of credit losses on the Company’s investment securities that have been recognized through earnings as of September 7, 2011 and September 30, 2010 (Predecessor periods). There were no credit losses on the Company’s investment securities recognized in earnings for the Predecessor periods from January 1 to September 7, 2011 or July 1 to September 7, 2011.


			Nine months
	Jan 1 - Sept 7		ended
	2011		9/30/2010
Beginning balance of credit losses at January 1, 2011 and 2010	$	1,069	$	976
Other-than-temporary impairment credit losses		—		93


Ending balance of cumulative credit losses recognized in earnings	$	1,069	$	1,069