Investment Securities

The following is a summary of the securities portfolio by major classification:



	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Residential mortgage-backed securities – GSE	$	22,692	$	620	$	—	$	23,312
Commercial mortgage-backed securities – private	6,759		113		—		6,872
Collateralized mortgage obligations – GSE	47,855		160		97		47,918
Municipals – non-taxable	15,510		708		—		16,218
Municipals – taxable	1,635		11		—		1,646
Corporate bonds	35,217		1,700		—		36,917
Marketable equity securities	37		33		—		70

	$	129,705	$	3,345	$	97	$	132,953



	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Residential mortgage-backed securities – GSE	$	19,452	$	19	$	107	$	19,364
Collateralized mortgage obligations – GSE	82,192		154		251		82,095
Municipals – non-taxable	13,281		263		30		13,514
Corporate bonds	28,042		39		115		27,966
Marketable equity securities	519		50		4		565

	$	143,486	$	525	$	507	$	143,504

The following tables summarize gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at September 30, 2012 and December 31, 2011:



	September 30, 2012
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:

Collateralized mortgage obligations – GSE	24,079		97		—		—		24,079		97
Corporate bonds	2,067		—		—		—		2,067		—

Total temporarily impaired securities	$	26,146	$	97	$	—	$	—	$	26,146	$	97



	December 31, 2011
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Residential mortgage-backed securities – GSE	$	9,153	$	107	$	—	$	—	$	9,153	$	107
Collateralized mortgage obligations – GSE	67,360		251		—		—		67,360		251
Municipals – non-taxable	2,637		30		—		—		2,637		30
Corporate bonds	15,819		115		—		—		15,819		115
Marketable equity securities	32		4		—		—		32		4

Total temporarily impaired securities	$	95,001	$	507	$	—	$	—	$	95,001	$	507

Unrealized losses on investment securities at September 30, 2012 related to seven GSE collateralized mortgage obligations and two investment grade corporate bonds. Unrealized losses on investment securities at December 31, 2011 related to eleven GSE collateralized mortgage obligations, four GSE mortgage-backed securities, three municipal securities, seven investment grade corporate bonds and one marketable equity security. At September 30, 2012 and December 31, 2011, none of the securities had been in an unrealized loss position for more than a twelve month period.

The securities in an unrealized loss position at September 30, 2012 have continued to perform and are expected to perform through maturity, and the issuers have not experienced significant adverse events that would call into question their ability to repay these debt obligations according to contractual terms. Further, because the Company does not intend to sell these investments and does not believe that it will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, unrealized losses on such securities are not considered to represent other-than-temporary impairment at September 30, 2012.

At September 30, 2012, the Company held no individual investment securities with an aggregate book value greater than 10% of stockholders’ equity. At September 30, 2012 and December 31, 2011, investment securities with a carrying value of $34,108 and $43,900, respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

The amortized cost and fair values of securities available for sale at September 30, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Less Than One Year		One to Five Years		Five to Ten Years		Over Ten Years		Equity Securities
Residential mortgage backed securities – GSE
Amortized cost	$	2,944	$	7,473	$	10,053	$	2,222	$	—
Fair value	3,024		7,676		10,321		2,291		—
Commercial mortgage backed securities – private
Amortized cost	—		6,759		—		—		—
Fair value	—		6,872		—		—		—
Collateralized mortgage obligations – GSE
Amortized cost	8,710		30,384		7,873		888		—
Fair value	8,724		30,424		7,884		886		—
Municipals – non-taxable
Amortized cost	—		6,776		4,205		4,529		—
Fair value	—		7,007		4,476		4,735		—
Municipals – taxable
Amortized cost	—		—		—		1,635		—
Fair value	—		—		—		1,646		—
Corporate bonds
Amortized cost	—		35,217		—		—		—
Fair value	—		36,917		—		—		—
Marketable equity securities
Amortized cost	—		—		—		—		37
Fair value	—		—		—		—		70

Total
Amortized cost	$	11,654	$	86,609	$	22,131	$	9,274	$	37
Fair value	$	11,748	$	88,896	$	22,681	$	9,558	$	70