6. INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2011

Marketable Securities [Text Block]

6. INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities at September 30, 2011 and December 31, 2010 consisted of the following (dollars in thousands):

Available-for-Sale
	September 30, 2011
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Debt securities:
Mortgage-backed securities	$	141,743	$	5,122	$	(54	)	$	146,811
Obligations of states and political subdivisions		25,428		1,027		(29	)		26,426
Equity securities:
Corporate stock		64		8		—			72
	$	167,235	$	6,157	$	(83	)	$	173,309

	December 31, 2010
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Debt securities:
Mortgage-backed securities	$	135,915	$	3,156	$	(427	)	$	138,644
Obligations of states and political subdivisions		15,675		242		(125	)		15,792
Equity securities:
Corporate stock		77		8		(6	)		79
	$	151,667	$	3,406	$	(558	)	$	154,515

Net unrealized gains on available-for-sale investment securities totaling $6,074,000 were recorded, net of $2,429,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at September 30, 2011. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the three-month period ended September 30, 2011 totaled $9,294,000 and $326,000, respectively and for the nine-month period ended September 30, 2011 totaled $10,886,000 and $353,000, respectively. There were no transfers of available-for-sale investment securities for the nine-month period ended September 30, 2011.

Net unrealized gains on available-for-sale investment securities totaling $2,848,000 were recorded, net of $1,139,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2010. Proceeds and gross realized gains (losses) from the sale and call of available-for-sale investment securities for the three-month period ended September 30, 2010 totaled $3,076,000 and $1,000, respectively and for the nine-month period ended September 30, 2010 totaled $6,921,000 and $(4,000), respectively. There were no transfers of available-for-sale investment securities during the year ended December 31, 2010.

Held-to-Maturity
	September 30, 2011
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Debt securities:
Mortgage-backed securities	$	4,505	$	254	$	—	$	4,759

	December 31, 2010
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Debt securities:
Mortgage-backed securities	$	6,149	$	323	$	—	$	6,472

There were no sales or transfers of held-to-maturity investment securities for the periods ended September 30, 2011 and December 31, 2010.

Investment securities with unrealized losses at September 30, 2011 and December 31, 2010 are summarized and classified according to the duration of the loss period as follows (dollars in thousands):

	2011
	Less than 12 Months					12 Months or More				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	Value		Losses			Value		Losses		Value		Losses
Available-for-Sale
Debt securities:
Mortgage-backed securities	$	12,948	$	(54	)					$	12,948	$	(54	)
Obligations of states and political subdivisions		2,633		(29	)						2,633		(29	)
	$	15,581	$	(83	)	$	—	$	—	$	15,581	$	(83	)

	2010
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Available-for-Sale
Debt securities:
Mortgage-backed securities	$	29,535	$	(427	)						$	29,535	$	(427	)
Obligations of states and political subdivisions		5,169		(125	)							5,169		(125	)
Equity Securities:
Corporate stock		5		(2	)	$	5	$	(4	)		10		(6	)
	$	34,709	$	(554	)	$	5	$	(4	)	$	34,714	$	(558	)

There were no held-to-maturity investment securities with unrealized losses as of September 30, 2011 or December 31, 2010.

At September 30, 2011, the Company held 169 securities of which 9 were in a loss position for less than twelve months and none were in a loss position for twelve months or more. Of the 9 securities in a loss position, 6 are mortgage-backed securities and 3 are obligations of states and political subdivisions. At December 31, 2010, the Company held 168 securities of which 29 were in a loss position for less than twelve months and 5 were in a loss position for twelve months or more. Of the 34 securities in a loss position, 15 were mortgage-backed securities, 11 were obligations of states and political subdivisions and 8 were corporate stocks.

The unrealized loss on the Company’s investments in mortgage-backed securities and obligations of states and political subdivisions at September 30, 2011 is primarily driven by interest rates. Because the decline in market value is attributable to a change in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be until maturity, management does not consider these investments to be other-than-temporarily impaired.

The amortized cost and estimated fair value of investment securities at September 30, 2011 by contractual maturity are shown below (dollars in thousands).

	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Within one year	$	1,126	$	1,139
After one year through five years		2,205		2,229
After five years through ten years		8,243		8,586
After ten years		13,854		14,472
		25,428		26,426
Investment securities not due at a single maturity date:
Mortgage-backed securities		141,743		146,811	$	4,505	$	4,759
Corporate stock		64		72
	$	167,235	$	173,309	$	4,505	$	4,759

Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.