SECURITIES

3 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Investment [Text Block]

3. SECURITIES

The amortized cost basis and fair values of securities are as follows:

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Securities available-for-sale:
March 31, 2013:
Government-sponsored mortgage-backed residential	$	142,932	$	451	$	(859	)	$	142,524
Government-sponsored collateralized mortgage obligations		109,342		1,830		(250	)		110,922
State and municipal		13,675		1,191		-			14,866
Corporate bonds		55,440		436		(148	)		55,728
Total	$	321,389	$	3,908	$	(1,257	)	$	324,040
December 31, 2012:
U.S. Treasury and agencies	$	8,284	$	7	$	(13	)	$	8,278
Government-sponsored mortgage-backed residential		144,617		774		(502	)		144,889
Government-sponsored collateralized mortgage obligations		148,460		2,033		(346	)		150,147
Private asset backed		4,981		151		-			5,132
State and municipal		11,394		1,324		-			12,718
Corporate bonds		32,567		433		(33	)		32,967
Total	$	350,303	$	4,722	$	(894	)	$	354,131

The amortized cost and fair value of securities at March 31, 2013, by contractual maturity, are shown below. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	Available for Sale
	Amortized		Fair
(Dollars in thousands)	Cost		Value
Due after one year through five years	$	49,490	$	49,809
Due after five years through ten years		4,773		4,828
Due after ten years		14,852		15,957
Investment securities with no single maturity date:
Government-sponsored mortgage-backed residential		142,932		142,524
Government-sponsored collateralized mortgage obligations		109,342		110,922
	$	321,389	$	324,040

The following schedule shows the proceeds from sales of available-for-sale securities and the gross realized gains and losses on those sales:

	Three Months Ended
	March 31,
	2013		2012
	(Dollars in thousands)
Proceeds from sales	$	75,536	$	27,854
Gross realized gains		509		-
Gross realized losses		282		150

Investment securities pledged to secure public deposits and FHLB advances had an amortized cost of $141.0 million and fair value of $143.0 million at March 31, 2013 and a $130.4 million amortized cost and fair value of $132.3 million at December 31, 2012.

Securities with unrealized losses at March 31, 2013 and December 31, 2012 aggregated by major security type and length of time in a continuous unrealized loss position are as follows:

March 31, 2013	Less than 12 Months					12 Months or More				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss		Value		Loss
Government-sponsored mortgage-backed residential	$	80,004	$	(859	)	$	-	$	-	$	80,004	$	(859	)
Government-sponsored collateralized mortgage obligations		27,773		(250	)		-		-		27,773		(250	)
Corporate bonds		24,800		(148	)		-		-		24,800		(148	)
Total temporarily impaired	$	132,577	$	(1,257	)	$	-	$	-	$	132,577	$	(1,257	)

December 31, 2012	Less than 12 Months					12 Months or More				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss		Value		Loss
U.S. Treasury and agencies	$	3,255	$	(13	)	$	-	$	-	$	3,255	$	(13	)
Government-sponsored mortgage-backed residential		82,137		(502	)		-		-		82,137		(502	)
Government-sponsored collateralized mortgage obligations		33,275		(346	)		-		-		33,275		(346	)
Corporate bonds		5,731		(33	)		-		-		5,731		(33	)
Total temporarily impaired	$	124,398	$	(894	)	$	-	$	-	$	124,398	$	(894	)

We evaluate investment securities with significant declines in fair value on a quarterly basis to determine whether they should be considered other-than-temporarily impaired under current accounting guidance, which generally provides that if a security is in an unrealized loss position, whether due to general market conditions or industry or issuer-specific factors, the holder of the securities must assess whether the impairment is other-than-temporary.

Accounting guidance requires entities to split other than temporary impairment charges between credit losses (i.e., the loss based on the entity’s estimate of the decrease in cash flows, including those that result from expected voluntary prepayments), which are charged to earnings, and the remainder of the impairment charge (non-credit component) to accumulated other comprehensive income. This requirement pertains to both debt securities held to maturity and debt securities available for sale.

The unrealized losses on our government-sponsored mortgage-backed residential securities, government-sponsored collateralized mortgage obligations and our corporate bonds were a result of changes in interest rates for fixed-rate securities where the interest rate received is less than the current rate available for new offerings of similar securities. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because we do not intend to sell and it is more likely than not that we will not be required to sell these investments until recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at March 31, 2013.

We recognized other-than-temporary impairment charges of $26,000 for the expected credit loss during the 2012 period. The 2012 impairment charge was related to Preferred Term Security VI which was called for early redemption in July 2012.

The table below presents a roll-forward of the credit losses recognized in earnings. During 2012, all of our trust preferred securities were either called or sold which represented the remaining balance in the OTTI roll-forward.

(Dollars in thousands)	Three Months Ended
	March 31,
	2012
Beginning balance	$	2,078
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized		26
Ending balance	$	2,104