10. INVESTMENT AND MORTGAGE-BACKED SECURITIES

The following is a summary of major categories of securities owned by the Company, excluding trading securities, at June 30, 2013:

			Unrealized Gains or Losses Recognized in Accumulated Other Comprehensive Loss
	Purchase Amortized / Historical Cost	Recorded Amortized/ Historical Cost ⁽¹⁾	Non-Credit OTTI	Unrealized Gains	Unrealized Losses	Book Value	Other Unrecognized Losses	Fair Value
Investment securities held-to-maturity:
Pooled bank trust preferred securities ("TRUPS")	$16,337	$7,390	$(617)	-	$(1,156)⁽²⁾	$5,617	$(76)	$5,541
Investment securities available for sale:
Registered Mutual Funds	2,790	2,684	-	502	-	3,175	-	3,175
Agency notes	15,070	15,070	-	64	-	15,134	-	15,134
Pass-through MBS issued by GSEs	34,183	34,183	-	1,557	-	35,740	-	35,740
Collateralized mortgage obligations ("CMOs") issued by GSEs	922	922	-	9	-	931	-	931
Private issuer pass through MBS	763	763	-	21	-	784	-	784
Private issuer CMOs	726	726	-	12	-	738	-	738

(1) Amount represents the purchase amortized / historical cost less any credit-related OTTI charges recognized through earnings.

(2) Amount represents the unamortized portion of the unrealized loss that was recognized in accumulated other comprehensive loss on September 1, 2008 (the day on which these securities were transferred from available-for-sale to held-to-maturity).

The following is a summary of major categories of securities owned by the Company at December 31, 2012:

			Unrealized Gains or Losses Recognized in Accumulated Other Comprehensive Loss
	Purchase Amortized / Historical Cost	Recorded Amortized/ Historical Cost ⁽¹⁾	Non-Credit OTTI	Unrealized Gains	Unrealized Losses	Book Value	Other Unrecognized Gains	Fair Value
Investment securities held-to-maturity:
TRUPS	$16,774	$7,829	$(634)	-	$(1,268)⁽²⁾	$5,927	$340	$6,267
Investment securities available for sale:
Registered Mutual Funds	2,904	2,556	-	449	-	3,005	-	3,005
Agency notes	29,820	29,820	-	125	-	29,945	-	29,945
Pass-through MBS issued by GSEs	43,142	43,142	-	1,561	(25)	44,678	-	44,678
CMOs issued by GSEs	2,436	2,436	-	26	-	2,462	-	2,462
Private issuer pass through MBS	962	962	-	-	(7)	955	-	955
Private issuer CMOs	908	908	-	18	-	926	-	926

(1) Amount represents the purchase amortized / historical cost less any credit-related OTTI charges recognized through earnings.

At June 30, 2013, the agency note investments in the table above had contractual maturities as follows:

	Amortized Cost		Estimated Fair Value
Due after one year through three years	$	15,000	$	15,064
Due after three years through five years		70		70
TOTAL	$	15,070	$	15,134

The held-to-maturity TRUPS had a weighted average term to maturity of 21.4 years at June 30, 2013. At June 30, 2013, MBS available-for-sale (which included pass-through MBS issued by GSEs, CMOs issued by GSEs, one private issuer pass through MBS and one private issuer CMO) possessed a weighted average contractual maturity of 17.0 years and a weighted average estimated duration of 1.5 years. There were no sales of investment securities either held-to-maturity or available-for-sale or sales of MBS available-for-sale during the three-months ended June 30, 2013 or 2012.

As of each reporting period through June 30, 2013, the Company has applied the protocol established by ASC 320-10-65 ("ASC 320-10-65") in order to determine whether OTTI existed for its TRUPS and/or to measure, for TRUPS that have been determined to be other than temporarily impaired, the credit related and non-credit related components of OTTI. As of June 30, 2013, five TRUPS were determined to meet the criteria for OTTI based upon this analysis. At June 30, 2013, these five securities had credit ratings ranging from "C" to "Caa3."

The following table provides a reconciliation of the pre-tax OTTI charges recognized on the Company's TRUPS:

	At or for the Three Months Ended June 30, 2013								At or for the Three Months Ended June 30, 2012
	Credit Related OTTI Recognized in Earnings		Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss			Total OTTI			Credit Related OTTI Recognized in Earnings			Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss			Total OTTI
Cumulative balance at the beginning of the period	$	8,946	$	625		$	9,571		$	9,155		$	926		$	10,081
OTTI recognized on securities with previous OTTI		-		-			-			-			-			-
Reductions and transfers to credit-related OTTI		-		-			-			-			(181	)		(181	)
Amortization of previously recognized OTTI		1		(8	)		(7	)		(210	)		(90	)		(300	)
Cumulative balance at end of the period	$	8,947	$	617		$	9,564		$	8,945		$	655		$	9,600

	At or for the Six Months Ended June 30, 2013								At or for the Six Months Ended June 30, 2012
	Credit Related OTTI Recognized in Earnings		Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss			Total OTTI			Credit Related OTTI Recognized in Earnings			Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss			Total OTTI
Cumulative balance at the beginning of the period	$	8,945	$	634		$	9,579		$	8,974		$	930		$	9,904
OTTI recognized on securities with previous OTTI		-		-			-			181			6			187
Reductions and transfers to credit-related OTTI		-		-			-			-			(181	)		(181	)
Amortization of previously recognized OTTI		2		(17	)		(15	)		(210	)		(100	)		(310	)
Cumulative balance at end of the period	$	8,947	$	617		$	9,564		$	8,945		$	655		$	9,600

The following table summarizes the gross unrealized losses and fair value of investment securities as of June 30, 2013, aggregated by investment category and the length of time the securities were in a continuous unrealized loss position:

	Less than 12 Months Consecutive Unrealized Losses				12 Months or More Consecutive Unrealized Losses				Total
	Fair Value		Gross Unrecognized/ Unrealized Losses		Fair Value		Gross Unrecognized/ Unrealized Losses		Fair Value		Gross Unrecognized/ Unrealized Losses
Held-to-Maturity Securities:
TRUPS ⁽¹⁾	$	-	$	-	$	3,685	$	1,315	$	3,685	$	1,315
Available for Sale Securities
Registered Mutual Funds		901		11		-		-		901		11

(1) At June 30, 2013, the recorded balance of these securities was $3,844. This balance reflected the remaining unrealized loss of $1,156 that was recognized in accumulated other comprehensive loss on September 1, 2008 (the day on which these securities were transferred from available-for-sale to held-to-maturity). In accordance with both ASC 320-10-35-17 and 320-10-65, this unrealized loss is currently being amortized over the remaining estimated life of these securities.

TRUPS That Have Maintained an Unrealized Holding Loss for 12 or More Consecutive Months

At June 30, 2013, impairment of two of the TRUPS, with an amortized cost of $5,000, was deemed temporary. These securities remained in an unrealized loss position for 12 or more consecutive months, and their cumulative unrealized loss was $1,315 at June 30, 2013, reflecting both illiquidity in the marketplace and concerns over future bank failures. At June 30, 2013, both of these securities had ratings ranging from "BB-" to "Ba1." Despite both the significant decline in market value and the duration of their impairment, management believed that the unrealized losses on these securities at June 30, 2013 were temporary, and that the full value of the investments would be realized once the market dislocations have been removed, or as the securities continued to make their contractual payments of principal and interest. In making this determination, management considered the following:

·	Based upon an internal review of the collateral backing the TRUPS portfolio, which accounted for current and prospective deferrals, the securities could reasonably be expected to continue making all contractual payments

·	The Company had the intent and ability to hold these securities until they fully recover their impairment, evidenced by the election to reclassify them as held-to-maturity in 2008

·	There were no cash or working capital requirements nor contractual or regulatory obligations that would compel the Company to sell these securities prior to their forecasted recovery or maturity

·	Each security has a pool of underlying issuers comprised primarily of banks

·	Neither of the securities have exposure to real estate investment trust issued debt (which has experienced high default

rates)

·	Each security featured either a mandatory auction or a de-leveraging mechanism that could result in principal repayments to the Bank prior to the stated maturity of the security

·	Each security is characterized by some level of over-collateralization

The following table summarizes the gross unrealized losses and fair value of investment securities and MBS as of December 31, 2012, aggregated by investment category and the length of time that the securities were in a continuous unrealized loss position:

	Less than 12 Months Consecutive Unrealized Losses				12 Months or More Consecutive Unrealized Losses				Total
	Fair Value		Gross Unrecognized/ Unrealized Losses		Fair Value		Gross Unrecognized/ Unrealized Losses		Fair Value		Gross Unrecognized/ Unrealized Losses
Held-to-Maturity Securities:
TRUPS ⁽¹⁾	$	-	$	-	$	3,705	$	1,732	$	3,705	$	1,732
Available-for-Sale Securities:
Federal Home Loan Mortgage Corporation pass-through certificates	$	5,867	$	25	$	-	$	-	$	5,867	$	25
Private label MBS		-		-		955		7		955		7

(1) At December 31, 2012, the recorded balance of these securities was $4,170. This balance reflected the remaining unrealized loss of $1,268 that was recognized in accumulated other comprehensive loss on September 1, 2008 (the day on which these securities were transferred from available-for-sale to held-to-maturity). In accordance with both ASC 320-10-35-17 and 320-10-65, this unrealized loss is currently being amortized over the remaining estimated life of these securities.