UNITEDSTATES SECURITIESAND EXCHANGECOMMISSION

WASHINGTON, DC  20549

FORM 10-Q

(Mark One)

þQuarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2012

oTransition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from_____to____

Commission File Number 000-33501

NORTHRIM BANCORP, INC.

_{(Exact name of registrant as specified in its charter)}

Alaska	92-0175752
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3111 C Street

Anchorage, Alaska 99503

_{(Address of principal executive offices)    (Zip Code)}

(907) 562-0062

_{(Registrant’s telephone number, including area code)}

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  þ  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  þ  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,”  “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer  o Accelerated filer  þ Non-accelerated filer  o Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o  No  þ

The number of shares of the issuer's Common Stock outstanding at November 8, 2012 was 6,476,834.

TABLE OF CONTENTS
PART  I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets: September 30, 2012, December 31, 2011 and September 30, 2011	4
	Consolidated Statements of Income: Three and nine months ended September 30, 2012 and 2011	5
	Consolidated Statements of Comprehensive Income: Three and nine months ended September 30 2012 and 2011	6
	Consolidated Statements of Changes in Shareholders’ Equity: Nine months ended September 30, 2012 and 2011	7
	Consolidated Statements of Cash Flows: Nine months ended September 30, 2012 and 2011	8
	Notes to the Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II	OTHER INFORMATION	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44
SIGNATURES		45

2

PART I. FINANCIAL INFORMATION

These consolidated financial statements should be read in conjunction with the financial statements, accompanying notes and other relevant information included in Northrim BanCorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011.

3

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

NORTHRIM BANCORP, INC.

Consolidated Balance Sheets

September 30, 2012,  December 31, 2011 and September 30, 2011

	September 30,		December 31,		September 30,
(In Thousands, Except Share Data)	2012		2011		2011
		(Unaudited)
ASSETS
Cash and due from banks	$	34,753	$	30,644	$	34,365
Interest bearing deposits in other banks		127,354		60,886		94,205
Investment securities available for sale		172,343		222,083		211,819
Investment securities held to maturity		2,750		3,819		4,385
Total portfolio investments		175,093		225,902		216,204
Investment in Federal Home Loan Bank stock		1,985		2,003		2,003
Loans held for sale		37,291		27,822		-
Loans		671,644		645,562		629,664
Allowance for loan losses		(16,490)		(16,503)		(16,093)
Net loans		692,445		656,881		613,571
Purchased receivables, net		23,326		30,209		25,536
Accrued interest receivable		2,832		2,898		3,030
Other real estate owned		5,766		5,183		5,838
Premises and equipment, net		27,989		27,993		28,320
Goodwill and intangible assets		8,228		8,421		8,486
Other assets		34,027		34,238		34,053
Total assets	$	1,133,798	$	1,085,258	$	1,065,611
LIABILITIES
Deposits:
Demand	$	352,633	$	324,039	$	307,529
Interest-bearing demand		137,333		141,572		133,495
Savings		85,035		79,610		76,847
Alaska CDs		98,504		102,384		95,481
Money market		171,210		154,987		153,924
Certificates of deposit less than $100,000		41,085		45,468		51,264
Certificates of deposit greater than $100,000		59,144		63,188		75,027
Total deposits		944,944		911,248		893,567
Securities sold under repurchase agreements		22,623		16,348		17,034
Borrowings		4,517		4,626		4,662
Junior subordinated debentures		18,558		18,558		18,558
Other liabilities		9,045		9,043		8,445
Total liabilities		999,687		959,823		942,266
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value, 2,500,000 shares authorized, none issued or outstanding
Common stock, $1 par value, 10,000,000 shares authorized, 6,473,680; 6,466,763; and 6,440,241 shares issued and outstanding at September 30, 2012, December 31, 2011 and September 30, 2011, respectively		6,474		6,467		6,440
Additional paid-in capital		53,536		53,164		53,091
Retained earnings		72,567		65,469		63,071
Accumulated other comprehensive income		1,429		283		680
Total Northrim BanCorp shareholders' equity		134,006		125,383		123,282
Noncontrolling interest		105		52		63
Total shareholders' equity		134,111		125,435		123,345
Total liabilities and shareholders' equity	$	1,133,798	$	1,085,258	$	1,065,611

See notes to consolidated financial statements

4

NORTHRIM BANCORP, INC.

Consolidated Statements of Income

For the Three and Nine Months Ended September 30, 2012 and 2011

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In Thousands, Except Per Share Data)	2012		2011		2012		2011
		(Unaudited)
Interest Income
Interest and fees on loans	$	10,416	$	10,392	$	30,946	$	31,788
Interest on investment securities-available for sale		673		717		2,140		2,251
Interest on investment securities-held to maturity		35		49		110		169
Interest on deposits in other banks		80		72		183		160
Total Interest Income		11,204		11,230		33,379		34,368
Interest Expense
Interest expense on deposits, borrowings and junior subordinated debentures		611		876		1,936		2,757
Net Interest Income		10,593		10,354		31,443		31,611
Provision (benefit) for loan losses		(1,437)		550		(1,259)		1,649
Net Interest Income After Provision (Benefit) for Loan Losses		12,030		9,804		32,702		29,962
Other Operating Income
Purchased receivable income		826		695		2,250		1,886
Employee benefit plan income		609		536		1,765		1,629
Service charges on deposit accounts		536		609		1,673		1,727
Electronic banking income		520		508		1,496		1,424
Equity in earnings from RML		963		357		1,669		575
Rental income		192		190		594		577
Gain on sale of securities		-		33		273		296
Other income		511		434		1,369		1,096
Total Other Operating Income		4,157		3,362		11,089		9,210
Other Operating Expense
Salaries and other personnel expense		5,484		5,230		16,344		15,746
Occupancy		842		914		2,758		2,821
Marketing expense		436		435		1,308		1,315
Professional and outside services		427		370		1,103		1,045
Reserve for purchased receivables		349		-		349		-
Software expense		304		257		825		774
Equipment expense		257		291		893		887
Insurance expense		236		391		655		1,122
OREO (income) expense, net rental income and gains on sale		249		(14)		464		(895)
Amortization of low income housing tax investments		231		224		693		675
Internet banking expense		171		162		528		473
Intangible asset amortization expense		64		70		193		211
Other operating expense		942		1,099		2,932		3,170
Total Other Operating Expense		9,992		9,429		29,045		27,344
Income Before Provision for Income Taxes		6,195		3,737		14,746		11,828
Provision for income taxes		1,991		1,125		4,568		3,357
Net Income		4,204		2,612		10,178		8,471
Less: Net income attributable to the noncontrolling interest		138		106		394		328
Net Income Attributable to Northrim BanCorp	$	4,066	$	2,506	$	9,784	$	8,143
Earnings Per Share, Basic	$	0.63	$	0.39	$	1.51	$	1.27
Earnings Per Share, Diluted	$	0.62	$	0.38	$	1.49	$	1.24
Weighted Average Shares Outstanding, Basic		6,471,572		6,436,178		6,469,673		6,431,989
Weighted Average Shares Outstanding, Diluted		6,570,772		6,554,776		6,570,287		6,553,462

See notes to consolidated financial statements

5

NORTHRIM BANCORP, INC.

Consolidated Statements of Comprehensive Income

For the Three and Nine Months Ended September 30, 2012 and 2011

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In Thousands)	2012		2011		2012		2011
	(Unaudited)
Net income	$	4,204	$	2,612	$	10,178	$	8,471
Other comprehensive income, net of tax:
Securities available for sale:
Net unrealized gains (losses) arising during the period	$	445	$	(456)	$	1,419	$	328
Reclassification of net gains included in net income		-		(33)		(273)		(296)
Other comprehensive income (loss)		445		(489)		1,146		32
Comprehensive income		4,649		2,123		11,324		8,503
Less: comprehensive income attributable to the noncontrolling interest		(138)		(106)		(394)		(328)
Comprehensive income attributable to Northrim BanCorp	$	4,511	$	2,017	$	10,930	$	8,175

See notes to consolidated financial statements

6

NORTHRIM BANCORP, INC.

Consolidated Statements of Changes in Shareholders’ Equity

For the Nine Months Ended September 30, 2012 and 2011

								Accumulated
	Common Stock			Additional				Other		Non-
	Number		Par	Paid-in		Retained		Comprehensive		controlling
(In Thousands)	of Shares		Value	Capital		Earnings		Income		Interest		Total
	(Unaudited)
Nine Months Ended September 30, 2011
Balance as of January 1, 2011	6,427	$	6,427	$	52,658	$	57,339	$	648	$	50	$	117,122
Cash dividend declared	-		-		-		(2,411)		-		-		(2,411)
Stock based compensation expense	-		-		381		-		-		-		381
Exercise of stock options	13		13		(32)		-		-		-		(19)
Excess tax benefits from share-based payment arrangements	-		-		84		-		-		-		84
Distributions to noncontrolling interest	-		-		-		-		-		(315)		(315)
Change in unrealized holding gain on available for sale securities, net of tax	-		-		-		-		32		-		32
Net income attributable to the noncontrolling interest	-		-		-		-		-		328		328
Net income attributable to Northrim BanCorp	-		-		-		8,143		-		-		8,143
Nine Months Ended September 30, 2011	6,440	$	6,440	$	53,091	$	63,071	$	680	$	63	$	123,345
Nine Months Ended September 30, 2012
Balance as of January 1, 2012	6,467	$	6,467	$	53,164	$	65,469	$	283	$	52	$	125,435
Cash dividend declared	-		-		-		(2,686)		-		-		(2,686)
Stock based compensation expense	-		-		339		-		-		-		339
Exercise of stock options	7		7		(22)		-		-		-		(15)
Excess tax benefits from share-based payment arrangements	-		-		55		-		-		-		55
Distributions to noncontrolling interest	-		-		-		-		-		(341)		(341)
Change in unrealized holding gain on available for sale securities, net of tax	-		-		-		-		1,146		-		1,146
Net income attributable to the noncontrolling interest	-		-		-		-		-		394		394
Net income attributable to Northrim BanCorp	-		-		-		9,784		-		-		9,784
Nine Months Ended September 30, 2012	6,474	$	6,474	$	53,536	$	72,567	$	1,429	$	105	$	134,111

See notes to consolidated financial statements

7

NORTHRIM BANCORP, INC.

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2012 and 2011

	Nine Months Ended
	September 30,
(In Thousands)	2012		2011
		(Unaudited)
Operating Activities:
Net income	$	10,178	$	8,471
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Gain on sale of securities, net		(273)		(296)
Depreciation and amortization of premises and equipment		1,242		1,299
Amortization of software		137		155
Intangible asset amortization		193		211
Amortization of investment security premium, net of discount accretion		156		144
Deferred tax (benefit) liability		(11)		(1,311)
Stock-based compensation		339		381
Excess tax benefits from share-based payment arrangements		(55)		(84)
Deferral of loan fees and costs, net		346		(240)
Provision (benefit) for loan losses		(1,259)		1,649
Reserve for purchased receivables		349		-
Purchases of loans held for sale		(185,673)		-
Proceeds from the sale of loans held for sale		176,204		5,558
Gain on sale of other real estate owned		18		(859)
Impairment on other real estate owned		173		-
Equity in undistributed earnings from mortgage affiliate		(320)		200
Net changes in assets and liabilities:
(Increase) decrease in accrued interest receivable		66		371
(Increase) decrease in other assets		(506)		2,105
Increase (decrease) in other liabilities		2		(208)
Net Cash Provided by Operating Activities		1,306		17,546
Investing Activities:
Investment in securities:
Purchases of investment securities-available-for-sale		(63,491)		(113,242)
Proceeds from sales/maturities of securities-available-for-sale		115,299		115,644
Proceeds from calls/maturities of securities-held-to-maturity		1,065		1,735
Purchases of domestic certificates of deposit		(11,500)		(12,000)
Proceeds from maturities of domestic certificates of deposit		10,000		-
Proceeds from redemption of FHLB stock		18		-
(Increase) decrease in purchased receivables, net		6,534		(9,007)
(Increase) decrease in loans, net		(26,866)		40,171
Proceeds from sale of other real estate owned		964		7,912
Investment in other real estate owned		(44)		(29)
Decrease in loan to Elliott Cove, net		110		122
Purchases of premises and equipment		(1,238)		(571)
Net Cash (Used) Provided by Investing Activities		30,851		30,735
Financing Activities:
(Decrease) increase in deposits		33,696		1,431
Increase in securities sold under repurchase agreements		6,275		4,160
(Decrease) in borrowings		(109)		(724)
Distributions to noncontrolling interest		(341)		(315)
Excess tax benefits from share-based payment arrangements		55		84
Cash dividends paid		(2,656)		(2,380)
Net Cash (Used) Provided by Financing Activities		36,920		2,256
Net Increase in Cash and Cash Equivalents		69,077		50,537
Cash and Cash Equivalents at Beginning of Period		79,530		66,033
Cash and Cash Equivalents at End of Period	$	148,607	$	116,570
Supplemental Information:
Income taxes paid	$	5,077	$	2,880
Interest paid	$	1,940	$	3,009
Transfer of loans to other real estate owned	$	1,684	$	2,255
Loans made to facilitate sales of other real estate owned	$	300	$	1,362
Cash dividends declared but not paid	$	30	$	31

See notes to consolidated financial statements

8

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012 and 2011

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared by Northrim BanCorp, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Certain reclassifications have been made to prior year amounts to maintain consistency with the current year with no impact on net income or total shareholders’ equity.  The Company determined that it operates as a single operating segment.  Operating results for the interim period ended September 30, 2012, are not necessarily indicative of the results anticipated for the year ending December 31, 2012.  These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

2.  Significant Accounting Policies and Recent Accounting Pronouncements

The Company’s significant accounting policies are discussed in Note 1 to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”).  Some of the amendments contained in ASU 2011-04 clarify the FASB’s intent about the application of existing fair value measurement requirements, and other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  This ASU was effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2011, and has been applied prospectively.  The adoption of this standard did not have a material impact on the Company’s consolidated financial position or results of operations.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”).  ASU 2011-05 amends Topic 220, “Comprehensive Income”, to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  ASU 2011-05 does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, nor does it change the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects.  In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update 2011-05 (“ASU 2011-12”).  This ASU defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments.  ASU 2011-12 was issued in order to allow the FASB time to redeliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the FASB is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, the Company will continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before the issuance of ASU 2011-05.  ASU 2011-12 was effective for the Company’s financial statements for annual and interim periods beginning after December 31, 2011, and has been applied prospectively.  The adoption of this standard did not have a material impact on the Company’s consolidated financial position or results of operations.

9

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (“ASU 2012-02”).  The objective of ASU 2012-02 is to reduce the cost and complexity of performing an impairment test for indefinite-lived intangible assets by simplifying how an entity tests those assets for impairment and to improve consistency in impairment testing guidance among long-lived asset categories.  The amendments permit an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill.  The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent.  Previous guidance in Subtopic 350-30 required an entity to test indefinite-lived intangible assets for impairment, on at least an annual basis, by comparing the fair value of the asset with its carrying amount.  If the carrying amount of the intangible asset exceeds its fair value, an entity should recognize an impairment loss in the amount of that excess.  In accordance with the amendments in ASU 2012-02, an entity will have an option not to calculate annually the fair value of an indefinite-lived intangible asset if the entity determines that it is not more likely than not that the asset is not impaired.  Permitting an entity to assess qualitative factors when testing indefinite-lived intangible assets for impairment results in guidance that is similar to the goodwill impairment testing guidance in ASU 2011-08.  ASU 2012-02 is effective for the Company’s financial statements for annual and interim periods beginning on or after September 15, 2012, and must be applied prospectively.  The Company does not expect this ASU to have a material impact on the Company’s consolidated financial position or results of operations.

3.  Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest-bearing deposits with other banks, banker’s acceptances, commercial paper, securities purchased under agreement to resell, federal funds sold, and securities with maturities of less than 90 days at acquisition.  As of September 30, 2012, the Company had two certificates of deposit totaling $13.5 million in another bank.  This is the only concentration representing more than 10% of the Company’s equity, other than cash and cash equivalent balances placed with the Federal Reserve of San Francisco.

4.  Investment Securities

The carrying values and approximate fair values of investment securities at the periods indicated are presented below:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		(In Thousands)
September 30, 2012
Securities available for sale
U.S. Treasury and government sponsored entities	$	99,505	$	467	$	-	$	99,972
Municipal securities		18,199		691		-		18,890
U.S. Agency mortgage-backed securities		41		2		-		43
Corporate bonds		48,644		1,035		-		49,679
Preferred stock		3,524		257		22		3,759
Total securities available for sale	$	169,913	$	2,452	$	22	$	172,343
Securities held to maturity
Municipal securities	$	2,750	$	246	$	-	$	2,996
Total securities held to maturity	$	2,750	$	246	$	-	$	2,996
December 31, 2011
Securities available for sale
U.S. Treasury and government sponsored entities	$	160,529	$	625	$	50	$	161,104
Municipal securities		16,260		675		-		16,935
U.S. Agency mortgage-backed securities		52		2		-		54
Corporate bonds		43,767		343		1,119		42,991
Preferred stock		996		3		-		999
Total securities available for sale	$	221,604	$	1,648	$	1,169	$	222,083
Securities held to maturity
Municipal securities	$	3,819	$	258	$	-	$	4,077
Total securities held to maturity	$	3,819	$	258	$	-	$	4,077
September 30, 2011
Securities available for sale
U.S. Treasury and government sponsored entities	$	153,017	$	831	$	22	$	153,826
Municipal securities		14,002		536		-		14,538
U.S. Agency mortgage-backed securities		56		2		-		58
Corporate bonds		43,593		439		635		43,397
Total securities available for sale	$	210,668	$	1,808	$	657	$	211,819
Securities held to maturity
Municipal securities	$	4,385	$	234	$	-	$	4,619
Total securities held to maturity	$	4,385	$	234	$	-	$	4,619

10

The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment.  There were two, twelve, and ten securities with unrealized losses as of September 30, 2012, December 31, 2011, and 2011, respectively that have been in a loss position for less than twelve months.  There were no securities with unrealized losses as of September 30, 2012, December 31, 2011, orSeptember 30, 2011 that have been in an unrealized loss position for more than twelve months.  Because the Company does not intend to sell, nor is it required to sell these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

At September 30, 2012, $38.9 million in securities, or 22%, of the investment portfolio was pledged, as compared to $32.1 million, or 14%, at December 31, 2011, and $30.3 million, or 14%, at September 30, 2011.  We held no securities of any single issuer (other than government sponsored entities) that exceeded 10% of our shareholders’ equity at September 30, 2012,  December 31, 2011 or September 30, 2011.

The amortized cost and fair values of debt securities at September 30, 2012, are distributed by contractual maturity as shown below.  Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.  Although preferred stock has no stated maturity, it is aggregated in the calculation of weighted average yields presented below in the category of investments that mature in ten years or more.

	Amortized Cost		Fair Value		Weighted Average Yield
		(In Thousands)
US Treasury and government sponsored entities
Within 1 year	$	9,998	$	10,007	0.63	%
1-5 years		89,507		89,965	0.69	%
Total	$	99,505	$	99,972	0.69	%
U.S. Agency mortgage-backed securities
5-10 years	$	41	$	43	4.45	%
Total	$	41	$	43	4.45	%
Corporate bonds
Within 1 year	$	3,163	$	3,181	2.89	%
1-5 years		45,481		46,498	2.49	%
Total	$	48,644	$	49,679	2.52	%
Preferred stock
Over 10 years		3,524		3,759	5.57	%
Total	$	3,524	$	3,759	5.57	%
Municipal securities
Within 1 year	$	1,493	$	1,495	0.95	%
1-5 years		10,304		10,619	2.28	%
5-10 years		6,290		6,686	4.68	%
Over 10 years		2,862		3,086	4.78	%
Total	$	20,949	$	21,886	3.24	%

11

The proceeds and resulting gains and losses, computed using specific identification, from sales of investment securities for the nine months ending September 30, 2012 and 2011, respectively, are as follows:

	Proceeds		Gross Gains		Gross Losses
	(In Thousands)
2012
Available for sale securities	$	30,424	$	273	$	-
2011
Available for sale securities	$	17,030	$	296	$	-

A summary of interest income for the nine months ending September 30, 2012 and 2011 on available for sale investment securities is as follows: