2. SECURITIES

A summary of the amortized cost, gross unrealized gains and losses and fair value of securities is as follows:

December 31,	2012									2011
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale:

U.S. GSE securities	$	178,421	$	377	$	(346	)	$	178,452	$	130,708	$	968	$	(2	)	$	131,674
State and municipal obligations	58,867		1,132		(36		)	59,963		52,861		1,366		(8		)	54,219
U.S. GSE residential mortgage-backed securities	19,462		1,135		—			20,597		67,317		3,667		—			70,984
U.S. GSE residential collateralized mortgage obligations	224,226		2,762		(542		)	226,446		175,878		3,493		(46		)	179,325
U.S. GSE commercial mortgage-backed securities	3,132		6		—			3,138		—		—		—			—
U.S. GSE commercial collateralized mortgage obligations	9,079		278		—			9,357		5,167		70		—			5,237
Non Agency commercial mortgage-backed securities	4,754		235		—			4,989		—		—		—			—
Other asset backed securities	26,588		65		(525		)	26,128		—		—		—			—
Total available for sale	524,529		5,990		(1,449		)	529,070		431,931		9,564		(56		)	441,439

Held to maturity:

U.S. GSE securities	4,992		24		—			5,016		—		—		—			—
State and municipal obligations	98,752		2,241		(31		)	100,962		104,314		2,048		(5		)	106,357
U.S. GSE residential mortgage-backed securities	9,483		26		—			9,509		—		—		—			—
U.S. GSE residential collateralized mortgage obligations	59,388		704		(404		)	59,688		42,081		1,104		(21		)	43,164
U.S. GSE commercial mortgage-backed securities	10,324		350		—			10,674		—		—		—			—
U.S. GSE commercial collateralized mortgage obligations	4,975		254		—			5,229		—		—		—			—
Corporate Bonds	22,821		134		(331		)	22,624		22,758		3		(1,330		)	21,431
Total held to maturity	210,735		3,733		(766		)	213,702		169,153		3,155		(1,356		)	170,952
Total securities	$	735,264	$	9,723	$	(2,215	)	$	742,772	$	601,084	$	12,719	$	(1,412	)	$	612,391

Securities with unrealized losses at year-end 2012 and 2011, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

December 31,	2012								2011
(In thousands)	Less than 12 months				Greater than 12 months				Less than 12 months				Greater than 12 months
	Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses

Available for sale:
U.S. GSE securities	$	79,692	$	346	$	—	$	—	$	7,196	$	2	$	—	$	—
State and municipal obligations	13,878		36		226		—		4,283		8		—		—
U.S. GSE residential mortgage-backed securities	90		—		—		—		—		—		—		—
U.S. GSE residential collateralized mortgage obligations	65,961		542		—		—		7,672		46		—		—

Other asset backed securities	18,109		525		—		—		—		—		—		—
Total available for sale	177,730		1,449		226		—		19,151		56		—		—

Held to maturity:
State and municipal obligations	28,939		31		—		—		7,011		5		—		—
U.S. GSE residential collateralized mortgage obligations	41,563		404		—		—		4,810		21		—		—
Corporate Bonds	—		—		17,669		331		4,664		336		12,006		994
Total held to maturity	$	70,502	$	435	$	17,669	$	331	$	16,485	$	362	$	12,006	$	994

Unrealized losses on securities have not been recognized into income, as the losses on these securities would be expected to dissipate as they approach their maturity dates. The Company evaluates securities for other-than-temporary impairment periodically and with increased frequency when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions, and whether the Company has the intent to sell the security or more than likely than not will be required to sell the security before its anticipated recovery. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its entities, whether downgrades by bond rating agencies have occurred, and the issuer’s financial condition.

At December 31, 2012, the majority of unrealized losses on available for sale securities are related to the Company’s U.S. GSE residential collateralized mortgage obligations, Other asset backed securities and U.S. GSE securities. The majority of unrealized losses on held to maturity securities are related to U.S. GSE residential collateralized mortgage obligations and corporate bonds. The decrease in fair value of the U.S. GSE residential collateralized mortgage obligations, Other asset backed securities and the corporate bond portfolio is attributable to changes in interest rates and not credit quality. Each issuer of corporate bonds has maintained their well capitalized status and continues to be reviewed periodically. The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2012.

The following table sets forth the fair value, amortized cost and maturities of the securities at December 31, 2012. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

December 31, 2012	Within One Year				After One But Within Five Years				After Five But Within Ten Years				After Ten Years				Total
(In thousands)	Fair Value Amount		Amortized Cost Amount		Fair Value Amount		Amortized Cost Amount		Fair Value Amount		Amortized Cost Amount		Fair Value Amount		Amortized Cost Amount		Fair Value Amount		Amortized Cost Amount
Available for sale:

U.S. GSE securities	$	—	$	—	$	568	$	539	$	137,880	$	137,824	$	40,004	$	40,058	$	178,452	$	178,421
State and municipal obligations	16,160		16,123		38,099		37,165		5,227		5,123		477		456		59,963		58,867
U.S. GSE residential mortgage-backed securities	—		—		568		533		9,831		9,314		10,198		9,615		20,597		19,462
U.S. GSE residential collateralized mortgage obligations	—		—		—		—		15,401		15,422		211,045		208,804		226,446		224,226
U.S. GSE commercial mortgage-backed securities	—		—		—		—		3,138		3,132		—		—		3,138		3,132
U.S. GSE commercial collateralized mortgage obligations	—		—		—		—		—		—		9,357		9,079		9,357		9,079
Non Agency commercial mortgage-backed securities	—		—		—		—		—		—		4,989		4,754		4,989		4,754
Other Asset backed securities	—		—		—		—		7,971		7,996		18,157		18,592		26,128		26,588
Total available for sale	16,160		16,123		39,235		38,237		179,448		178,811		294,227		291,358		529,070		524,529

Held to maturity:

U. S. GSE securities	—		—		—		—		5,016		4,992		—		—		5,016		4,992
State and municipal obligations	50,390		50,362		25,459		25,058		6,756		6,270		18,357		17,062		100,962		98,752
U.S. GSE residential mortgage-backed securities	—		—		—		—		—		—		9,509		9,483		9,509		9,483
U.S. GSE residential collateralized mortgage obligations	—		—		—		—		780		751		58,908		58,637		59,688		59,388
U.S. GSE commercial mortgage-backed securities	—		—		—		—		10,674		10,324		—		—		10,674		10,324
U.S. GSE commercial collateralized mortgage obligations	—		—		—		—		—		—		5,229		4,975		5,229		4,975
Corporate Bonds	—		—		22,624		22,821		—		—		—		—		22,624		22,821
Total held to maturity	50,390		50,362		48,083		47,879		23,226		22,337		92,003		90,157		213,702		210,735
Total securities	$	66,550	$	66,485	$	87,318	$	86,116	$	202,674	$	201,148	$	386,230	$	381,515	$	742,772	$	735,264

There were $152.0 million of proceeds on sales of available for sale securities with gross gains of approximately $3.2 million and gross losses of approximately $0.6 realized in 2012. There were $14.1 million of proceeds on sales of available for sale securities with gross gains of approximately $0.1 million and gross losses of approximately $0.01 realized in 2011. There were $31.4 million of proceeds on sales of available for sale securities and gross gains of approximately $1.3 million realized in 2010. No securities were sold at a loss in 2010.

Securities having a fair value of approximately $333.0 million and $287.8 million at December 31, 2012 and 2011, respectively, were pledged to secure public deposits and Federal Home Loan Bank and Federal Reserve Bank overnight borrowings. The Company did not hold any trading securities during the years ended December 31, 2012, 2011 and 2010.

As of December 31, 2012, there was one issuer, other than U.S. Government and its Sponsored Entities, where the Bank had invested holdings that exceeded 10% of stockholder’s equity and represented 13% of stockholder’s equity. These assets are more than 95% backed by a U.S. Government guarantee. There were no investment holdings of any one issuer that exceeded 10% of stockholders’ equity at December 31, 2011, other than U.S. Government and its Sponsored Entities. As of December 31, 2010, there was one issuer where the Bank had invested holdings that exceeded 10% of stockholder’s equity and represented 14% of stockholder’s equity. The majority of these holdings matured in the first quarter of 2011.