Securities:

6 Months Ended

Jun. 30, 2011

Securities: [Abstract]

Securities:

Securities:

The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolio at June 30, 2011 and December 31, 2010 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized			Fair
June 30, 2011	Cost		Gains		Losses			Value
U.S. Treasury and U.S. government sponsored entities	$	87,200	$	3,750	$	(15	)	$	90,935
State and political subdivisions		80,045		2,456		(691	)		81,810
Mortgage-backed securities — residential		157,505		4,620		(395	)		161,730
Collateralized mortgage obligations		22,850		238		0			23,088
Equity securities		149		373		(16	)		506
Other securities		250		16		0			266
Totals	$	347,999	$	11,453	$	(1,117	)	$	358,335
(In Thousands of Dollars) December 31, 2010
U.S. Treasury and U.S. government sponsored entities	$	67,376	$	2,768	$	(166	)	$	69,978
State and political subdivisions		81,397		1,215		(2,146	)		80,466
Mortgage-backed securities — residential		140,681		4,099		(1,003	)		143,777
Collateralized mortgage obligations		20,021		1		(362	)		19,660
Equity securities		149		66		(16	)		199
Other securities		250		17		0			267
Totals	$	309,874	$	8,166	$	(3,693	)	$	314,347

There was one security sale during the three and six month periods ended June 30, 2011. Proceeds from the sale were $3.4 million with no gain or loss recognized. Proceeds from sales of securities were $1.9 million for the three and six month periods ended June 30, 2010. Gross losses of $3 thousand were realized on these sales, during the second quarter of 2010.

The amortized cost and fair value of the debt securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage backed securities are not due at a single maturity date and are shown separately.

	June 30, 2011
	Amortized		Fair
(In Thousands of Dollars)	Cost		Value
Maturity
Within one year	$	4,300	$	4,385
One to five years		98,306		102,048
Five to ten years		40,161		40,699
Beyond ten years		24,728		25,879
Mortgage-backed and CMO securities		180,355		184,818
Total	$	347,850	$	357,829

The following table summarizes the investment securities with unrealized losses at June 30, 2011 and December 31, 2010, aggregated by major security type and length of time in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2011	Value		Losses			Value		Losses			Value		Losses
Available-for-sale
U.S. Treasury and U.S. government-sponsored entities	$	4,976	$	(10	)	$	288	$	(5	)	$	5,264	$	(15	)
State and political subdivisions		22,234		(580	)		851		(111	)		23,085		(691	)
Mortgage-backed securities — residential		43,337		(395	)		25		(0	)		43,362		(395	)
Equity securities		0		0			7		(16	)		7		(16	)
Total	$	70,547	$	(985	)	$	1,171	$	(132	)	$	71,718	$	(1,117	)

	Less Than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2010	Value		Losses			Value		Losses			Value		Losses
Available-for-sale
U.S. Treasury and U.S. government-sponsored entities	$	8,458	$	(160	)	$	313	$	(6	)	$	8,771	$	(166	)
State and political subdivisions		36,118		(1,981	)		790		(165	)		36,908		(2,146	)
Mortgage-backed securities — residential		45,567		(1,002	)		26		(1	)		45,593		(1,003	)
Collateralized mortgage obligations		19,594		(362	)		0		0			19,594		(362	)
Equity securities		0		0			8		(16	)		8		(16	)
Total	$	109,737	$	(3,505	)	$	1,137	$	(188	)	$	110,874	$	(3,693	)

Other-Than-Temporary-Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Investment securities are generally evaluated for OTTI under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 320, Investments — Debt and Equity Securities. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, or U.S. government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income or loss. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

As of June 30, 2011, the Company’s security portfolio consisted of 414 securities, 53 of which were in an unrealized loss position. The majority of the unrealized losses on the Company’s securities are related to its holdings of U.S. government-sponsored entities, state and political subdivisions, and mortgage-backed securities as discussed below.

Unrealized losses on debt securities issued by U.S. government-sponsored entities have not been recognized into income because the securities are of high credit quality, management does not have the intent to sell these securities before their anticipated recovery and the decline in fair value is largely due to fluctuations in market interest rates and not credit quality. Consequently, the fair value of such debt securities is expected to recover as the securities approach their maturity date.

Unrealized losses on debt securities at June 30, 2011 relative to obligations of state and political subdivisions have not been recognized into income. Generally, these debt securities have maintained their investment grade ratings and management does not have the intent to sell these securities before their anticipated recovery, which may be at maturity.

All of the Company’s holdings of mortgage-backed securities were issued by U.S. government sponsored enterprises. Unrealized losses on mortgage-backed securities have not been recognized into income. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be OTTI.