Investment Securities

Investment securities at June 30, 2013 and December 31, 2012 are summarized as follows:



	June 30, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(Amounts in thousands)
Available-for-sale securities:
Securities of U.S. government agencies due:
After 1 but within 5 years	$	16,937	$	—	$	312	$	16,625
	16,937		—		312		16,625
Government sponsored agencies:
Residential mortgage-backed securities due:
Within 1 year	18		—		—		18
After 1 but within 5 years	253		14		—		267
After 5 but within 10 years	17,651		337		—		17,988
After 10 years	100,277		1,619		1,150		100,746
	118,199		1,970		1,150		119,019
Collateralized mortgage obligations due:
After 5 but within 10 years	7,258		148		3		7,403
After 10 years	63,707		794		133		64,368
	70,965		942		136		71,771
Private label collateralized mortgage obligations due:
After 5 but within 10 years	166		—		1		165
After 10 years	12,333		17		132		12,218
	12,499		17		133		12,383
State and municipal securities due:
Within 1 year	1,060		25		—		1,085
After 1 but within 5 years	5,870		274		—		6,144
After 5 but within 10 years	34,102		1,223		454		34,871
After 10 years	72,190		575		4,455		68,310
	113,222		2,097		4,909		110,410
Common and preferred stocks:	88		49		—		137
Total available-for-sale securities	$	331,910	$	5,075	$	6,640	$	330,345



	December 31, 2012
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(Amounts in thousands)
Available-for-sale securities:
Securities of U.S. government agencies due:
Within 1 year	$	10,005	$	15	$	—	$	10,020
After 1 but within 5 years	17,479		29		1		17,507
	27,484		44		1		27,527
Government sponsored agencies:
Residential mortgage-backed securities due:
Within 1 year	119		2		—		121
After 1 but within 5 years	315		26		—		341
After 5 but within 10 years	10,371		341		—		10,712
After 10 years	94,319		2,089		325		96,083
	105,124		2,458		325		107,257
Collateralized mortgage obligations due:
After 1 but within 5 years	648		2		—		650
After 5 but within 10 years	9,975		206		3		10,178
After 10 years	111,155		902		292		111,765
	121,778		1,110		295		122,593
Private label collateralized mortgage obligations due:
After 5 but within 10 years	178		—		—		178
After 10 years	848		19		—		867
	1,026		19		—		1,045
State and municipal securities due:
Within 1 year	620		6		—		626
After 1 but within 5 years	5,734		321		—		6,055
After 5 but within 10 years	24,464		1,698		12		26,150
After 10 years	50,031		2,064		361		51,734
	80,849		4,089		373		84,565
Common and preferred stocks:	88		46		1		133
Total available-for-sale securities	$	336,349	$	7,766	$	995	$	343,120

Mortgage-backed securities are included in maturity groups based upon stated maturity date. At June 30, 2013, $119.0 million of the Bank's mortgage-backed securities were pass-through securities and $84.2 million were collateralized mortgage obligations. At December 31, 2012, $107.3 million of the Bank's mortgage-backed securities were pass-through securities and $123.6 million were collateralized mortgage obligations. Actual maturity will vary based on repayment of the underlying mortgage loans.

Gross realized gains on the sale of securities for the three and six months ended June 30, 2013 were $318,281 and $322,141, respectively. There were $46,584 and $46,589 in gross losses on the sale of securities available-for-sale for the three and six months ended June 30, 2013, respectively. There were $300,142 in gross gains and no losses for the three and six months ended June 30, 2012, respectively.

Investment securities with carrying values of approximately $88,332,425 and $88,652,919 at June 30, 2013 and December 31, 2012, respectively, were pledged as collateral for public deposits and for other purposes as required or permitted by law.

The following table presents the gross unrealized losses and fair value of investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2013 and December 31, 2012. Securities that have been in a loss position for twelve months or more at June 30, 2013 include one private label collateralized mortgage obligation. The key factors considered in evaluating the collateralized mortgage obligations, private label collateralized mortgage obligations, and municipal securities were cash flows of the investment and the assessment of other relative economic factors. Securities that have been in a loss position for twelve months or more at December 31, 2012 include three collateralized mortgage obligations, one private label collateralized mortgage obligation and two other securities. The unrealized losses relate to securities that have incurred fair value reductions due to a shift in demand from non-governmental securities and municipals to U.S. Treasury bonds and governmental agencies due to credit market concerns. The unrealized losses are not likely to reverse unless market interest rates decline to the levels that existed when the securities were purchased. None of the unrealized losses relate to the marketability of the securities or the issuer's ability to honor redemption obligations. It is not more likely than not that the Company will have to sell the investments before recovery of their amortized cost bases. For the three and six months ended June 30, 2013, there were no securities available-for-sale deemed to be other than temporarily impaired (“OTTI”).

If management determines that an investment has experienced an other than temporary impairment, the loss is recognized in the income statement.



	Less Than 12 Months				12 Months or More				Total
June 30, 2013	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
	(Amounts in thousands)
Securities available-for-sale:
U.S. government agencies	$	16,625	$	312	$	—	$	—	$	16,625	$	312
Government sponsored agencies:
Residential mortgage-backed securities	32,615		1,150		—		—		32,615		1,150
Collateralized mortgage obligations	15,580		136		—		—		15,580		136
Private label collateralized mortgage obligations	6,725		132		165		1		6,890		133
State and municipal securities	64,691		4,909		—		—		64,691		4,909
Total temporarily impaired securities	$	136,236	$	6,639	$	165	$	1	$	136,401	$	6,640



	Less Than 12 Months				12 Months or More				Total
December 31, 2012	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
	(Amounts in thousands)
Securities available-for-sale:
U.S. government agencies	$	2,429	$	1	$	—	$	—	$	2,429	$	1
Government sponsored agencies:
Residential mortgage-backed securities	12,021		325		—		—		12,021		325
Collateralized mortgage obligation	27,417		127		7,626		168		35,043		295
Private label collateralized mortgage obligations	—		—		178		—		178		—
State and municipal securities	22,899		373		—		—		22,899		373
Common and preferred stocks, and other	—		—		60		1		60		1
Total temporarily impaired securities	$	64,766	$	826	$	7,864	$	169	$	72,630	$	995