Note 4 - Investment Securities

9 Months Ended

Sep. 30, 2011

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 4:  Investment Securities

The amortized cost, unrealized gains and losses accumulated in other comprehensive income, and fair value of the available for sale investment securities portfolio follows:

	Investment Securities Available for Sale
	At September 30, 2011
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
U.S. Treasury securities	$	3,541	$	59	$	-		$	3,600
Securities of U.S. government sponsored entities		128,157		383		(42	)		128,498
Residential mortgage-backed securities		93,328		5,984		(6	)		99,306
Commercial mortgage-backed securities		4,606		24		(6	)		4,624
Obligations of states and political subdivisions		257,481		8,801		(471	)		265,811
Residential collateralized mortgage obligations		51,919		2,384		-			54,303
Asset-backed securities		7,933		-		(282	)		7,651
FHLMC and FNMA stock		824		1,968		(5	)		2,787
Corporate securities		114,441		199		(1,863	)		112,777
Other securities		2,397		1,928		(42	)		4,283
Total	$	664,627	$	21,730	$	(2,717	)	$	683,640

The amortized cost, unrealized gains and losses, and fair value of the held to maturity investment securities portfolio follows:

	Investment Securities Held to Maturity
	At September 30, 2011
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Residential mortgage-backed securities	$	34,072	$	1,646	$	-		$	35,718
Obligations of states and political subdivisions		513,823		20,045		(371	)		533,497
Residential collateralized mortgage obligations		208,011		3,405		(2,301	)		209,115
Total	$	755,906	$	25,096	$	(2,672	)	$	778,330

The amortized cost, unrealized gains and losses accumulated in other comprehensive income, and fair value of the available for sale investment securities portfolio follows:

	Investment Securities Available for Sale
	At December 31, 2010
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
U.S. Treasury securities	$	3,554	$	-	$	(12	)	$	3,542
Securities of U.S. government sponsored entities		175,080		162		(2,365	)		172,877
Residential mortgage-backed securities		105,702		4,142		(15	)		109,829
Commercial mortgage-backed securities		5,081		7		(23	)		5,065
Obligations of states and political subdivisions		264,757		2,423		(6,047	)		261,133
Residential collateralized mortgage obligations		24,709		894		-			25,603
Asset-backed securities		9,060		-		(774	)		8,286
FHLMC and FNMA stock		824		42		(211	)		655
Corporate securities		79,356		200		(365	)		79,191
Other securities		2,655		2,699		(51	)		5,303
Total	$	670,778	$	10,569	$	(9,863	)	$	671,484

The amortized cost, unrealized gains and losses, and fair value of the held to maturity investment securities portfolio follows:

	Investment Securities Held to Maturity
	At December 31, 2010
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Residential mortgage-backed securities	$	40,531	$	1,797	$	-		$	42,328
Obligations of states and political subdivisions		455,372		13,142		(1,142	)		467,372
Residential collateralized mortgage obligations		84,825		2,198		(2,012	)		85,011
Total	$	580,728	$	17,137	$	(3,154	)	$	594,711

The amortized cost and fair value of securities by contractual maturity are shown in the following table:

	At September 30, 2011
	Securities Available				Securities Held
	for Sale				to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Maturity in years:
1 year or less	$	36,061	$	36,229	$	10,910	$	10,980
Over 1 to 5 years		275,954		275,655		136,765		140,613
Over 5 to 10 years		60,795		62,417		318,260		331,886
Over 10 years		138,743		144,036		47,888		50,018
Subtotal		511,553		518,337		513,823		533,497
Mortgage-backed securities and residential collateralized mortgage obligations		149,853		158,233		242,083		244,833
Other securities		3,221		7,070		-		-
Total	$	664,627	$	683,640	$	755,906	$	778,330

The amortized cost and fair value of securities by contractual maturity are shown in the following table:

	At December 31, 2010
	Securities Available				Securities Held
	for Sale				to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Maturity in years:
1 year or less	$	21,362	$	21,460	$	6,057	$	6,103
Over 1 to 5 years		315,777		314,605		92,837		95,608
Over 5 to 10 years		64,565		64,804		351,407		360,602
Over 10 years		130,103		124,160		5,071		5,059
Subtotal		531,807		525,029		455,372		467,372
Mortgage-backed securities and residential collateralized mortgage obligations		135,492		140,497		125,356		127,339
Other securities		3,479		5,958		-		-
Total	$	670,778	$	671,484	$	580,728	$	594,711

Expected cash flows from mortgage-backed securities and collateralized mortgage obligations can differ from contractual cash flows because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. In addition, such factors as prepayments and interest rates may affect the yield on the carrying value of mortgage-backed securities.

An analysis of gross unrealized losses of the available for sale investment securities portfolio follows:

	Investment Securities Available for Sale
	At September 30, 2011
	Less than 12 Months					12 Months or Longer					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(In thousands)
Securities of U.S. government sponsored entities	$	15,012	$	(42	)	$	-	$	-		$	15,012	$	(42	)
Residential mortgage-backed securities		2,540		(3	)		973		(3	)		3,513		(6	)
Residential collateralized mortgage obligations		18		-			-		-			18		-
Commercial mortgage-backed securities		-		-			1,365		(6	)		1,365		(6	)
Obligations of states and political subdivisions		8,115		(102	)		22,117		(369	)		30,232		(471	)
Asset-backed securities		-		-			7,651		(282	)		7,651		(282	)
FHLMC and FNMA stock		-		-			1		(5	)		1		(5	)
Corporate securities		44,222		(1,187	)		24,324		(676	)		68,546		(1,863	)
Other securities		2		-			1,959		(42	)		1,961		(42	)
Total	$	69,909	$	(1,334	)	$	58,390	$	(1,383	)	$	128,299	$	(2,717	)

An analysis of gross unrealized losses of the held to maturity investment securities portfolio follows:

	Investment Securities Held to Maturity
	At September 30, 2011
	Less than 12 Months					12 Months or Longer					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(In thousands)
Obligations of States and political subdivisions	$	22,747	$	(193	)	$	7,075	$	(178	)	$	29,822	$	(371	)
Residential collateralized mortgage obligations		32,010		(135	)		15,962		(2,166	)		47,972		(2,301	)
Total	$	54,757	$	(328	)	$	23,037	$	(2,344	)	$	77,794	$	(2,672	)

The unrealized losses on the Company’s investments in mortgage obligations and asset backed securities were caused by market conditions for these types of investments.  The Company evaluates these securities on a quarterly basis including changes in security ratings issued by rating agencies, delinquency and loss information with respect to the underlying collateral, changes in the levels of subordination for the Company’s particular position within the repayment structure, and remaining credit enhancement as compared to expected credit losses of the security.

The unrealized losses on the Company’s investments in obligations of states and political subdivisions were caused by conditions in the municipal securities market.  The Company’s investments in obligations of states and political subdivisions primarily finance essential community services such as school districts, water delivery systems, hospitals and fire protection services. Further, these bonds are primarily “bank qualified” issues whereby the issuing authority’s total debt issued in any one year does not exceed $30 million, thereby qualifying the bonds for tax-exempt status for federal income tax purposes. The Company evaluates these securities quarterly to determine if a change in security rating has occurred or the municipality has experienced financial difficulties.  Substantially all of these securities continue to be investment grade rated.

The unrealized losses on the Company’s investments in corporate securities were caused by changes in interest rates and market conditions for these types of investments.

The Company does not intend to sell any investments and has concluded that it is more likely than not that it will not be required to sell the investments prior to recovery of the amortized cost basis. Therefore, the Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2011.

The fair values of the investment securities could decline in the future if the issuers’ financial condition deteriorates, the general economy deteriorates, credit ratings decline, or the liquidity for securities is low.  As a result, other than temporary impairments may occur in the future.

An analysis of gross unrealized losses of the available for sale investment securities portfolio follows:

	Investment Securities Available for Sale
	At December 31, 2010
	Less than 12 Months					12 Months or Longer					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(In thousands)
U.S. Treasury securities	$	3,542	$	(12	)	$	-	$	-		$	3,542	$	(12	)
Securities of U.S. government sponsored entities		146,083		(2,365	)		-		-			146,083		(2,365	)
Residential mortgage-backed securities		1,534		(15	)		-		-			1,534		(15	)
Commercial mortgage-backed securities		3,028		(23	)		-		-			3,028		(23	)
Obligations of states and political subdivisions		132,014		(5,505	)		10,341		(542	)		142,355		(6,047	)
Asset-backed securities		-		-			8,286		(774	)		8,286		(774	)
FHLMC and FNMA stock		550		(211	)		-		-			550		(211	)
Corporate securities		44,752		(365	)		-		-			44,752		(365	)
Other securities		1		-			1,948		(51	)		1,949		(51	)
Total	$	331,504	$	(8,496	)	$	20,575	$	(1,367	)	$	352,079	$	(9,863	)

An analysis of gross unrealized losses of the held to maturity investment securities portfolio follows:

	Investment Securities Held to Maturity
	At December 31, 2010
	Less than 12 Months					12 Months or Longer					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(In thousands)
Obligations of states and political subdivisions	$	22,157	$	(382	)	$	18,663	$	(760	)	$	40,820	$	(1,142	)
Residential collateralized mortgage obligations		-		-			20,182		(2,012	)		20,182		(2,012	)
Total	$	22,157	$	(382	)	$	38,845	$	(2,772	)	$	61,002	$	(3,154	)

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2011		2010		2011		2010
	(In thousands)
Taxable	$	4,624	$	3,957	$	12,604	$	12,585
Tax-exempt		7,453		6,812		22,421		20,503
Total interest income from investment securities	$	12,077	$	10,769	$	35,025	$	33,088