INTEREST-BEARING DEPOSITS AND SECURITIES

The following table sets forth additional detail regarding our interest-bearing deposits and securities at the dates indicated (includes securities—trading, available-for-sale and held-to-maturity, all at carrying value) (in thousands):



	September 30 2012		December 31 2011		September 30 2011
Interest-bearing deposits included in cash and due from banks	$	143,251	$	69,758	$	234,824
U.S. Government and agency obligations	159,885		341,606		292,012
Municipal bonds:
Taxable	26,742		18,497		15,220
Tax exempt	106,171		88,963		92,432
Total municipal bonds	132,913		107,460		107,652
Corporate bonds	40,505		42,565		52,238
Mortgage-backed or related securities:
Fannie Mae (FNMA)	158,334		66,519		47,177
Freddie Mac (FHLMC)	65,661		42,001		25,350
Ginnie Mae (GNMA)	29,665		19,572		20,815
Private issuer	1,412		1,835		2,589
Total mortgage-backed or related securities	255,072		129,927		95,931
Asset-backed securities:
Student Loan Marketing Association (SLMA)	32,752		—		—
Equity securities (excludes FHLB stock)	50		402		545
Total securities	621,177		621,960		548,378
FHLB stock	37,038		37,371		37,371
	$	801,466	$	729,089	$	820,573

Securities—Trading: The amortized cost and estimated fair value of securities—trading at September 30, 2012 and December 31, 2011 are summarized as follows (dollars in thousands):



	September 30, 2012						December 31, 2011
	Amortized Cost		Fair Value		Percent of Total		Amortized Cost		Fair Value		Percent of Total
U.S. Government and agency obligations	$	1,380	$	1,642	2.3	%	$	2,401	$	2,635	3.3	%
Municipal bonds:
Taxable	—		—		—		391		420		0.5
Tax exempt	5,439		5,535		7.6		5,431		5,542		6.9
Total municipal bonds	5,439		5,535		7.6		5,822		5,962		7.4
Corporate bonds	57,820		35,180		48.4		63,502		35,055		43.4
Mortgage-backed or related securities:
FNMA	19,383		21,543		29.7		23,489		25,427		31.5
FHLMC	7,981		8,643		11.9		10,535		11,246		13.9
Total mortgage-backed or related securities	27,364		30,186		41.6		34,024		36,673		45.4
Equity securities	14		50		0.1		6,914		402		0.5
	$	92,017	$	72,593	100.0	%	$	112,663	$	80,727	100.0	%

There were three sales of securities—trading totaling $2.2 million with a resulting gain of $10,000 during the nine months ended September 30, 2012. There were no sales of securities—trading during the nine months ended September 30, 2011. The Company recognized $409,000 in OTTI charges on securities—trading related to certain equity securities issued by government sponsored entities during the nine months ended September 30, 2012 and no OTTI charges during the nine months ended September 30, 2011. At September 30, 2012, there were no securities—trading in a nonaccrual status. At September 30, 2011, there was one single-issuer trust preferred security that was on nonaccrual; however, subsequently, deferred and current payments have been received, removing the security from nonaccrual status.

The amortized cost and estimated fair value of securities—trading at September 30, 2012 and December 31, 2011, by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.



	September 30, 2012				December 31, 2011
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	1,000	$	1,009
Due after one year through five years	1,543		1,614		1,545		1,626
Due after five years through ten years	4,076		4,101		4,087		4,123
Due after ten years through twenty years	1,626		1,645		6,544		6,184
Due after twenty years	57,394		34,997		58,549		30,710
	64,639		42,357		71,725		43,652
Mortgage-backed securities	27,364		30,186		34,024		36,673
Equity securities	14		50		6,914		402
	$	92,017	$	72,593	$	112,663	$	80,727

Securities—Available-for-Sale: The amortized cost and estimated fair value of securities—available-for-sale at September 30, 2012 and December 31, 2011 are summarized as follows (dollars in thousands):



	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Percent of Total
U.S. Government and agency obligations	$	157,662	$	584	$	(4	)	$	158,242	34.4	%
Municipal bonds:
Taxable	15,940		268		(41		)	16,167		3.5
Tax exempt	23,571		269		(4		)	23,836		5.2
Total municipal bonds	39,511		537		(45		)	40,003		8.7
Corporate bonds	4,027		48		—			4,075		0.9
Mortgage-backed or related securities:
FNMA	135,929		1,276		(414		)	136,791		29.7
FHLMC	56,631		476		(89		)	57,018		12.4
GNMA	28,533		1,211		(79		)	29,665		6.5
Private issuer	1,329		83		—			1,412		0.3
Total mortgage-backed or related securities	222,422		3,046		(582		)	224,886		48.9
Asset-backed securities:
SLMA	32,606		194		(48		)	32,752		7.1
	$	456,228	$	4,409	$	(679	)	$	459,958	100.0	%

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Percent of Total
U.S. Government and agency obligations	$	338,165	$	862	$	(56	)	$	338,971	72.8	%
Municipal bonds:
Taxable	10,358		225		(2		)	10,581		2.3
Tax exempt	16,535		210		(16		)	16,729		3.6
Total municipal bonds	26,893		435		(18		)	27,310		5.9
Corporate bonds	6,240		20		—			6,260		1.3
Mortgage-backed or related securities:
FHLMC	30,504		284		(33		)	30,755		6.6
FNMA	40,897		310		(115		)	41,092		8.8
GNMA	18,145		1,427		—			19,572		4.2
Private issuer	1,735		100		—			1,835		0.4
Total mortgage-backed or related securities	91,281		2,121		(148		)	93,254		20.0
	$	462,579	$	3,438	$	(222	)	$	465,795	100.0	%

At September 30, 2012 and December 31, 2011, an aging of unrealized losses and fair value of related securities—available-for-sale was as follows (in thousands):



	September 30, 2012
	Less Than 12 Months					12 Months or More				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government and agency obligations	$	11,054	$	(4	)	$	—	$	—	$	11,054	$	(4	)
Municipal bonds:
Taxable	5,224		(41		)	—		—		5,224		(41		)
Tax exempt	2,519		(4		)	—		—		2,519		(4		)
Total municipal bonds	7,743		(45		)	—		—		7,743		(45		)
Mortgage-backed or related securities:
FNMA	48,467		(414		)	—		—		48,467		(414		)
FHLMC	17,239		(89		)	—		—		17,239		(89		)
GNMA	9,417		(79		)	—		—		9,417		(79		)
Total mortgage-backed or related securities	75,123		(582		)	—		—		75,123		(582		)
Asset-backed securities:
SLMA	5,013		(48		)	—		—		5,013		(48		)
	$	98,933	$	(679	)	$	—	$	—	$	98,933	$	(679	)

	December 31, 2011
	Less Than 12 Months					12 Months or More				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government and agency obligations	$	74,326	$	(56	)	$	—	$	—	$	74,326	$	(56	)
Municipal bonds:
Taxable	3,599		(2		)	—		—		3,599		(2		)
Tax exempt	4,075		(16		)	—		—		4,075		(16		)
Total municipal bonds	7,674		(18		)	—		—		7,674		(18		)
Mortgage-backed or related securities:
FNMA	27,332		(115		)	—		—		27,332		(115		)
FHLMC	6,556		(33		)	—		—		6,556		(33		)
Total mortgage-backed or related securities	33,888		(148		)	—		—		33,888		(148		)
	$	115,888	$	(222	)	$	—	$	—	$	115,888	$	(222	)

Proceeds from the sale of three securities—available-for-sale during the nine months ended September 30, 2012 were $13.3 million with a resulting gain of $38,000 compared to proceeds of $13.2 million from the sale of three securities with no resulting gain or loss during the nine months ended September 30, 2011. At September 30, 2012, there were 23 securities—available for sale with unrealized losses, compared to 26 securities at December 31, 2011. Management does not believe that any individual unrealized loss as of September 30, 2012 represents OTTI. The decline in fair market values of these securities was generally due to changes in interest rates and changes in market-desired spreads subsequent to their purchase.

The amortized cost and estimated fair value of securities—available-for-sale at September 30, 2012 and December 31, 2011, by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.



	September 30, 2012				December 31, 2011
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	17,266	$	17,301	$	19,520	$	19,602
Due after one year through five years	157,169		158,130		312,862		313,930
Due after five years through ten years	37,693		37,776		38,916		39,009
Due after ten years through twenty years	21,678		21,865		—		—
Due after twenty years	—		—		—		—
	233,806		235,072		371,298		372,541
Mortgage-backed securities	222,422		224,886		91,281		93,254
	$	456,228	$	459,958	$	462,579	$	465,795

Securities—Held-to-Maturity: The amortized cost and estimated fair value of securities—held-to-maturity at September 30, 2012 and December 31, 2011 are summarized as follows (dollars in thousands):



	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Percent of Total
Municipal bonds:
Taxable	$	10,575	$	462	$	(91	)	$	10,946	11.5	%
Tax exempt	76,801		6,179		—			82,980		87.2
Total municipal bonds	87,376		6,641		(91		)	93,926		98.7
Corporate bonds	1,250		—		—			1,250		1.3
	$	88,626	$	6,641	$	(91	)	$	95,176	100.0	%

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Percent of Total
Municipal bonds:
Taxable	$	7,496	$	390	$	—		$	7,886	9.8	%
Tax exempt	66,692		4,281		—			70,973		88.6
Total municipal bonds	74,188		4,671		—			78,859		98.4
Corporate bonds	1,250		—		(2		)	1,248		1.6
	$	75,438	$	4,671	$	(2	)	$	80,107	100.0	%

At September 30, 2012 and December 31, 2011, an age analysis of unrealized losses and fair value of related securities—held-to-maturity was as follows (in thousands):



	September 30, 2012
	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Municipal bonds:
Taxable	$	4,238	$	(91	)	$	—	$	—		$	4,238	$	(91	)
	$	4,238	$	(91	)	$	—	$	—		$	4,238	$	(91	)

	December 31, 2011
	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	—	—			$	498	$	(2	)	$	498	$	(2	)
	$	—	—			$	498	$	(2	)	$	498	$	(2	)

There were no sales of securities—held-to-maturity during the nine months ended September 30, 2012 and 2011. The Company recognized no OTTI charges on securities—held-to-maturity during the nine months ended September 30, 2012. During the same period in 2011, we did recognize $3.0 million from the recovery of one security—held-to-maturity which had previously been charged off as OTTI in the previous year; however, there were no other OTTI charges for the nine months ended September 30, 2011. As of September 30, 2012, there were no securities—held-to-maturity in a nonaccrual status. There were two securities—held-to-maturity with unrealized losses at September 30, 2012 and December 31, 2011, respectively. Management does not believe that any individual unrealized loss as of September 30, 2012 represents OTTI. The decline in fair market value of these securities was generally due to changes in interest rates and changes in market-desired spreads subsequent to their purchase.

The amortized cost and estimated fair value of securities—held-to-maturity at September 30, 2012 and December 31, 2011, by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.



	September 30, 2012				December 31, 2011
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	4,152	$	4,164	$	2,707	$	2,768
Due after one year through five years	14,539		15,332		14,420		15,150
Due after five years through ten years	11,395		11,823		9,726		10,254
Due after ten years through twenty years	56,248		61,334		46,741		49,936
Due after twenty years	2,292		2,523		1,844		1,999
	$	88,626	$	95,176	$	75,438	$	80,107

Pledged Securities: The following table presents, as of September 30, 2012, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):



	Amortized Cost		Fair Value
Purpose or beneficiary:
State and local governments public deposits	$	92,740	$	99,358
Interest rate swap counterparties	10,841		11,025
Retail repurchase agreements	101,315		104,036
Other	5,976		6,149
Total pledged securities	$	210,872	$	220,568