Note 6 - Investment Securities

6 Months Ended

Jun. 30, 2012

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

6.  Investment Securities

The following tables summarize the amortized costs and estimated fair value of the securities portfolio at June 30, 2012 and December 31, 2011. The summary is divided into available for sale and held to maturity investment securities.

June 30, 2012 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	76,264	$	285	$	10	$	76,539
Obligations of states and political subdivisions		98,655		4,385		85		102,955
Mortgage-backed securities – residential		417,417		12,051		124		429,344
Mortgage-backed securities – commercial		30		-		-		30
Mutual funds and equity securities		1,451		16		13		1,454
Corporate debt securities		7,993		47		1,506		6,534
Total securities – available for sale	$	601,810	$	16,784	$	1,738	$	616,856
Held To Maturity
Obligations of states and political subdivisions	$	875	$	122	$	-	$	997

December 31, 2011 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	95,770	$	408	$	15	$	96,163
Obligations of states and political subdivisions		80,801		3,903		85		84,619
Mortgage-backed securities – residential		397,675		11,384		196		408,863
Mortgage-backed securities – commercial		203		6		-		209
Mutual funds and equity securities		1,601		-		-		1,601
Corporate debt securities		7,901		-		1,537		6,364
Total securities – available for sale	$	583,951	$	15,701	$	1,833	$	597,819
Held To Maturity
Obligations of states and political subdivisions	$	875	$	99	$	-	$	974

The amortized cost and estimated fair value of the debt securities portfolio at June 30, 2012, by contractual maturity, are detailed below. The summary is divided into available for sale and held to maturity securities. 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. Mortgage-backed securities are stated separately due to the nature of payment and prepayment characteristics of these securities, as principal is not due at a single date.

	Available For Sale				Held To Maturity
June 30, 2012 (In thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	11,273	$	11,262	$	-	$	-
Due after one year through five years		73,957		74,672		-		-
Due after five years through ten years		76,922		80,197		-		-
Due after ten years		20,760		19,897		875		997
Mortgage-backed securities		417,447		429,374		-		-
Total	$	600,359	$	615,402	$	875	$	997

Gross realized gains and losses on the sale of available for sale investment securities were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2012		2011		2012		2011
Gross realized gains	$	688	$	413	$	695	$	826
Gross realized losses		3		-		7		3
Net realized gains	$	685	$	413	$	688	$	823

Investment securities with unrealized losses at June 30, 2012 and December 31, 2011 not recognized in income are presented in the tables below. The tables segregate investment securities that have been in a continuous unrealized loss position for less than twelve months from those that have been in a continuous unrealized loss position for twelve months or more. The tables also include the fair value of the related securities.

	Less than 12 Months				12 Months or More				Total
June 30, 2012 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	9,140	$	10	$	-	$	-	$	9,140	$	10
Obligations of states and political subdivisions		7,259		66		6,503		19		13,762		85
Mortgage-backed securities – residential		51,131		124		-		-		51,131		124
Mutual funds and equity securities		664		13		-		-		664		13
Corporate debt securities		351		4		4,341		1,502		4,692		1,506
Total	$	68,545	$	217	$	10,844	$	1,521	$	79,389	$	1,738

	Less than 12 Months				12 Months or More				Total
December 31, 2011 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	13,494	$	15	$	-	$	-	$	13,494	$	15
Obligations of states and political subdivisions		2,913		20		6,886		65		9,799		85
Mortgage-backed securities – residential		56,249		196		-		-		56,249		196
Corporate debt securities		-		-		4,299		1,537		4,299		1,537
Total	$	72,656	$	231	$	11,185	$	1,602	$	83,841	$	1,833

Unrealized losses included in the tables above have not been recognized in income since they have been identified as temporary. The Company evaluates investment securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market conditions warrant. Many factors are considered, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was effected by macroeconomic conditions, and (4) whether the Company has the intent to sell the security or more likely than not will be required to sell the security before its anticipated recovery. The assessment of whether an OTTI charge exists involves a high degree of subjectivity and judgment and is based on the information available to the Company at a point in time.

At June 30, 2012, the Company’s investment securities portfolio had gross unrealized losses of $1.7 million, an improvement of $95 thousand or 5.2% from year-end 2011. Of the total gross unrealized losses at June 30, 2012, $1.5 million relates to investments that have been in a continuous loss position for 12 months or more. Significantly all of the investments in a unrealized losses position for 12 or more months consist of corporate debt securities. The unrealized loss position of $1.5 million attributed to corporate debt securities represents an improvement of $35 thousand or 2.3% from year-end 2011, but represents an increase of $611 thousand or 68.6% compared with the previous quarter.

Corporate debt securities in the Company’s investment securities portfolio at June 30, 2012 include $4.3 million carrying value of single-issuer trust preferred capital securities issued by a national and global financial services firm. These securities are currently performing and, although downgraded in the current quarter, continues to be rated as investment grade by major rating agencies. The total unrealized loss on corporate debt securities is primarily attributed to the single-issuer trust preferred capital securities. The unrealized losses on these securities is mainly a result of the general decline in financial markets and illiquidity events that began in 2008 and is not due to adverse changes in the expected cash flows of the individual securities. Overall market declines, particularly of banking and financial institutions, are a result of significant stress throughout the regional and national economy that began during 2008 and has not fully stabilized.

The Company attributes the unrealized losses in other sectors of its investment securities portfolio to changes in market interest rates. In general, market rates for these securities exceed the yield available at the time many of the securities in the portfolio were purchased. The Company does not expect to incur a loss on these securities unless they are sold prior to maturity. The Company’s current intent is to hold these securities until recovery.

Investment securities with unrealized losses at June 30, 2012 are performing according to their contractual terms. The Company does not have the intent to sell these securities and likely will not be required to sell these securities before their anticipated recovery. The Company does not consider any of the securities to be impaired due to reasons of credit quality or other factors.