Mortgage-Backed Securities Available For Sale

12 Months Ended

Dec. 31, 2011

Mortgage-Backed Securities Available For Sale [Abstract]

Mortgage-Backed Securities Available For Sale

(4) Mortgage-Backed Securities Available for Sale

The amortized cost and estimated market value of mortgage-backed securities available for sale at December 31, 2011 and 2010 are as follows (in thousands):

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
FHLMC	$	74,155	$	950	$	(48	)	$	75,057
FNMA		279,414		9,369		(21	)		288,762
GNMA		935		177		—			1,112
	$	354,504	$	10,496	$	(69	)	$	364,931
	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
FHLMC	$	19,225	$	386	$	(13	)	$	19,598
FNMA		315,024		5,344		—			320,368
GNMA		1,037		172		—			1,209
	$	335,286	$	5,902	$	(13	)	$	341,175

There were no gains or losses realized on the sale of mortgage-backed securities available for sale during 2011, 2010 or 2009.

The contractual maturities of mortgage-backed securities available for sale are generally 15 years or longer at purchase; however, the effective lives are expected to be shorter due to principal prepayments. Due to the low interest rate environment prepayment levels accelerated in 2011 and 2010.

The estimated market value (carrying amount) of mortgage-backed securities pledged as required security for deposits and for other purposes required by law amounted to $264,323,000 and $202,678,000 at December 31, 2011 and 2010, respectively. The estimated market value (carrying amount) of mortgage-backed securities pledged as collateral for reverse repurchase agreements amounted to $75,181,000 and $77,163,000 at December 31, 2011 and 2010, respectively.

The estimated market value and unrealized loss for mortgage-backed securities available for sale at December 31, 2011 and 2010, segregated by the duration of the unrealized loss are as follows (in thousands):

	December 31, 2011
	Less than 12 months					12 months or longer				Total
	Estimated Market Value		Unrealized Losses			Estimated Market Value		Unrealized Losses		Estimated Market Value		Unrealized Losses
FHLMC	$	24,662	$	(48	)	$	—	$	—	$	24,662	$	(48	)
FNMA		15,348		(21	)		—		—		15,348		(21	)
	$	40,010	$	(69	)	$	—	$	—	$	40,010	$	(69	)
	December 31, 2010
	Less than 12 months					12 months or longer				Total
	Estimated Market Value		Unrealized Losses			Estimated Market Value		Unrealized Losses		Estimated Market Value		Unrealized Losses
FHLMC	$	4,982	$	(13	)	$	—	$	—	$	4,982	$	(13	)
	$	4,982	$	(13	)	$	—	$	—	$	4,982	$	(13	)

The mortgage-backed securities are issued and guaranteed by either FHLMC or FNMA, corporations which are chartered by the United States Government and whose debt obligations are typically rated AA+ by one of the internationally recognized credit rating services. FHLMC and FNMA have been under the conservatorship of the Federal Housing Financial Agency since September 8, 2008. The conservatorships have no specified termination date. Also, FHLMC and FNMA have entered into Stock Purchase Agreements, which following the issuance of Senior Preferred Stock and Warrants to the United States Treasury, provide FHLMC and FNMA funding commitments from the United States Treasury. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated market value of the mortgage-backed securities. Although these mortgage-backed securities are available for sale, the Company does not intend to sell the securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that unrealized losses on these available for sale securities were only temporarily impaired at December 31, 2011.