Note 2 - Investment Securities

12 Months Ended

Dec. 31, 2012

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

2.  Investment Securities

The following tables summarize the amortized cost and estimated fair values of the securities portfolio at December 31, 2012 and 2011 and the corresponding amounts of gross unrealized gains and losses.  The summary is divided into available for sale and held to maturity securities.

December 31, 2012 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	75,945	$	216	$	66	$	76,095
Obligations of states and political subdivisions		113,986		4,943		174		118,755
Mortgage-backed securities – residential		360,099		10,596		256		370,439
Corporate debt securities		6,638		44		856		5,826
Mutual funds and equity securities		1,962		33		2		1,993
Total securities – available for sale	$	558,630	$	15,832	$	1,354	$	573,108
Held To Maturity
Obligations of states and political subdivisions	$	820	$	136	$	-	$	956

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
Corporate debt securities		7,901		-		1,537		6,364
Mutual funds and equity securities		1,601		-		-		1,601
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

At year-end 2012 and 2011, the Company held no investment securities of any single issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The amortized cost and estimated fair value of the securities portfolio at December 31, 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 issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mutual funds and equity securities in the available for sale portfolio at December 31, 2012 consist of investments attributed to the Company’s captive insurance subsidiary. These securities have no stated maturity and are not included in the maturity schedule that follows.

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
December 31, 2012 (In thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	918	$	921	$	-	$	-
Due after one year through five years		57,440		58,166		-		-
Due after five years through ten years		109,844		113,430		-		-
Due after ten years		28,367		28,159		820		956
Mortgage-backed securities		360,099		370,439		-		-
Total	$	556,668	$	571,115	$	820	$	956

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

(In thousands)	2012		2011		2010
Gross realized gains	$	1,349	$	1,529	$	9,166
Gross realized losses		140		174		277
Net realized gain	$	1,209	$	1,355	$	8,889
Income tax provision related to net realized gain	$	423	$	474	$	3,111

Investment securities with a carrying value of $285 million and $334 million at December 31, 2012 and 2011 were pledged to secure public and trust deposits, repurchase agreements, and for other purposes.

Investment securities with unrealized losses at year-end 2012 and 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 table also includes the fair value of the related securities.

	Less than 12 Months				12 Months or More				Total
December 31, 2012 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	26,433	$	66	$	-	$	-	$	26,433	$	66
Obligations of states and political subdivisions		17,199		174		-		-		17,199		174
Mortgage-backed securities – residential		39,659		256		-		-		39,659		256
Mutual funds and equity securities		299		2		-		-		299		2
Corporate debt securities		-		-		4,994		856		4,994		856
Total	$	83,590	$	498	$	4,994	$	856	$	88,584	$	1,354

	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 debt security or more likely than not will be required to sell the debt 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 December 31, 2012, the Company’s investment securities portfolio had gross unrealized losses of $1.4 million, a decrease of $479 thousand or 26.1% compared to year-end 2011. Of the total gross unrealized losses at December 31, 2012, $856 thousand or 63.2% relate to investments in corporate debt securities that have been in a continuous loss position for 12 months or more.

Corporate debt securities in the Company’s investment securities portfolio at December 31, 2012 include single-issuer trust preferred capital securities with a carrying value of $5.0 million. These securities were issued by a national and global financial services firm and were purchased by the Company during 2007. The securities are currently performing and, although downgraded in the second quarter of 2012, continues to be rated as investment grade by major rating agencies. The issuer of the securities announced in the first quarter of 2012 that it had passed stringent regulatory stress testing as well as receiving regulatory approval to both increase per share common dividend payments and initiate a new equity repurchase program. The Company does not intend to sell these securities nor does the Company believe it is likely that it will be required to sell these securities prior to their anticipated recovery. The Company believes these securities are not impaired due to reasons of credit quality or other factors, but rather the unrealized loss is primarily attributed to continuing uncertainties in both international and domestic economies and market volatility. The Company believes that it will collect all amounts due according to the contractual terms of these securities and that the fair values of these securities will continue to recover as they approach their maturity dates.

The Company attributes the unrealized losses in other sectors of its investment securities portfolio to changes in market interest rates. In general, market rates related to these securities exceeded the yield available at the time of purchase. Investment securities with unrealized losses at December 31, 2012 are performing according to their contractual terms, and the Company does not expect to incur a loss on these securities unless they are sold prior to maturity. 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.