INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2012

INVESTMENT SECURITIES [Abstract]

INVESTMENT SECURITIES

9. INVESTMENT SECURITIES

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at September 30, 2012 are summarized as follows:

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses			Estimated fair value
Investment securities available-for-sale:
U.S. Treasury securities	$	1,996	$	11	$	—		$	2,007
Securities of U.S. government agencies and corporations		27,245		138	__				27,383
Obligations of states and political subdivisions		25,595		1,598		(21	)		27,172
Collateralized mortgage obligations		8,203		133	__				8,336
Mortgage-backed securities		116,490		1,653		(98	)		118,045
Total debt securities	$	179,529	$	3,533	$	(119	)	$	182,943

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2011 are summarized as follows:

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses			Estimated fair value
Investment securities available-for-sale:
U.S. Treasury securities	$	2,294	$	20	$	—		$	2,314
Securities of U.S. government agencies and corporations		36,820		203		(9	)		37,014
Obligations of states and political subdivisions		19,735		894		(12	)		20,617
Mortgage-backed securities		100,130		586		(420	)		100,296
Total debt securities	$	158,979	$	1,703	$	(441	)	$	160,241

There were no proceeds from sales of available-for-sale securities for the nine-month and three-month periods ended September 30, 2012.  Proceeds from sales of available-for-sale securities were $24,640,000 and $6,558,000 for the nine-month and three-month periods ended September 30, 2011. Gross realized gains from calls of available-for-sale securities were $1 and $0 for the nine-month and three-month periods ended September 30, 2012, respectively.  Gross realized gains from available-for-sale securities were $633,000 and $177,000 for the nine-month and three-month periods ended September 30, 2011.  There were no gross realized losses from sales of available-for-sale securities for the nine-month and three-month periods ended September 30, 2012 and September 30, 2011.

The amortized cost and estimated market value of debt and other securities at September 30, 2012, by contractual and expected maturity, are shown in the following table.

(in thousands)	Amortized cost		Estimated fair value
Due in one year or less	$	14,862	$	14,920
Due after one year through five years		123,826		125,606
Due after five years through ten years		28,596		29,470
Due after ten years		12,245		12,947
	$	179,529	$	182,943

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.  Securities due after one year through five years included mortgage-backed securities with expected maturities totaling $101,793,000.  The maturities on these securities were based on the average lives of the securities.

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of September 30, 2012, follows:

	Less than 12 months					12 months or more				Total
(in thousands)	Fair Value		Unrealized losses			Fair Value		Unrealized losses		Fair Value		Unrealized losses
Obligations of states and political subdivisions		1,134		(21	)		—		—		1,134		(21	)
Mortgaged-backed      securities		14,493		(98	)		—		—		14,493		(98	)
Total	$	15,627	$	(119	)		—		—	$	15,627	$	(119	)

No decline in value was considered "other-than-temporary" during 2012.  Eleven securities that had a fair value of $15,627,000 and a total unrealized loss of $119,000 have been in an unrealized loss position for less than twelve months as of September 30, 2012. The declines in fair value were primarily attributable to changes in interest rates.  As the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities prior to their anticipated recovery, these investments are not considered other-than-temporarily impaired.

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2011, follows:

	Less than 12 months					12 months or more					Total
(in thousands)	Fair Value		Unrealized losses			Fair Value		Unrealized losses			Fair Value		Unrealized losses
Securities of U.S. government agencies and corporations	$	4,034	$	(9	)	$	—	$	—		$	4,034	$	(9	)
Obligations of states and political subdivisions		506		(10	)		167		(2	)		673		(12	)
Mortgage-backed securities		47,861		(420	)		—		—			47,861		(420	)
Total	$	52,401	$	(439	)	$	167	$	(2	)	$	52,568	$	(441	)

Investment securities carried at $32,406,000 and $34,206,000 at September 30, 2012 and December 31, 2011, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.