INVESTMENT SECURITIES (In Thousands)

A summary of the amortized costs and the approximate fair values of securities at March 31, 2012, December 31, 2011 and March 31, 2011 is presented below. Amortized cost is reported net of other-than-temporary impairment charges.

Securities Available-for-Sale



	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
March 31, 2012
U.S. Agency Obligations	$	65,303	$	65,660	$	357	$	—
State and Municipal Obligations	43,186		43,482		308		12
Collateralized Mortgage Obligations - Residential	125,109		129,713		4,756		152
Mortgage-Backed Securities - Residential	220,185		225,669		5,484		—
Corporate and Other Debt Securities	1,028		828		—		200
Mutual Funds and Equity Securities	1,365		1,433		74		6
Total Securities Available-for-Sale	$	456,176	$	466,785	$	10,979	$	370

December 31, 2011
U.S. Agency Obligations	$	116,055	$	116,393	$	342	$	4
State and Municipal Obligations	44,712		44,999		305		18
Collateralized Mortgage Obligations - Residential	144,362		149,669		5,526		219
Mortgage-Backed Securities - Residential	237,756		243,043		5,287		—
Corporate and Other Debt Securities	1,015		1,015		—		—
Mutual Funds and Equity Securities	1,365		1,419		69		15
Total Securities Available-for-Sale	$	545,265	$	556,538	$	11,529	$	256

March 31, 2011
U.S. Agency Obligations	$	105,252	$	105,291	$	126	$	87
State and Municipal Obligations	98,546		98,648		113		11
Collateralized Mortgage Obligations - Residential	143,039		149,753		7,219		505
Mortgage-Backed Securities - Residential	187,465		188,217		2,471		1,719
Corporate and Other Debt Securities	1,509		1,487		—		22
Mutual Funds and Equity Securities	1,354		1,393		66		27
Total Securities Available-for-Sale	$	537,165	$	544,789	$	9,995	$	2,371

Securities Held-to-Maturity:



	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
March 31, 2012
State and Municipal Obligations	$	159,790	$	167,109	$	7,415	$	96
Mortgage-Backed Securities - Residential	39,817		39,670		17		164
Corporate and Other Debt Securities	1,000		1,000		—		—
Total Securities Held-to-Maturity	$	200,607	$	207,779	$	7,432	$	260

December 31, 2011
State and Municipal Obligations	$	149,688	$	158,059	$	8,378	$	7
Corporate and Other Debt Securities	1,000		1,000		—		—
Total Securities Held-to-Maturity	$	150,688	$	159,059	$	8,378	$	7

March 31, 2011
State and Municipal Obligations	$	146,217	$	148,895	$	2,839	$	161
Corporate and Other Debt Securities	1,000		1,000		—		—
Total Securities Held-to-Maturity	$	147,217	$	149,895	$	2,839	$	161

As reported in the Consolidated Balance Sheets, Other Investments include Federal Home Loan Bank of New York (“FHLBNY”) and Federal Reserve Bank (“FRB”) stock, which are reported at cost. FHLBNY and FRB stock are restricted investment securities and amounted to $3,351 and $1,031 at March 31, 2012, respectively, $5,691 and $1,031 at December 31, 2011, respectively and $6,843 and $859 at March 31, 2011, respectively. The required level of FHLBNY stock is based on the amount of FHLBNY borrowings and is pledged to secure those borrowings. While some Federal Home Loan Banks have stopped paying dividends and repurchasing stock upon reductions in debt levels, the FHLBNY continues to pay dividends and repurchase its stock. Accordingly, we have not recognized any impairment on our holdings of FHLBNY common stock. However, the FHLBNY has reported impairment issues among its holdings of mortgage-backed securities.

A summary of the maturities of securities as of March 31, 2012 is presented in the following table. Mutual funds and equity securities, which have no stated maturity, are not included in the table. Collateralized mortgage obligations and other mortgage-backed-securities are included in the schedule based on their expected average lives. Actual maturities will differ from the table below because issuers may have the right to call or prepay obligations with or without prepayment penalties.



Debt Securities:	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within One Year:
U.S. Agency Obligations	$	25,291	$	25,326	$	—	$	—
State and Municipal Obligations	10,069		10,085		14,712		14,842
Collateralized Mortgage Obligations - Residential	6,557		6,701		—		—
Mortgage-Backed Securities - Residential	1,789		1,842		—		—
Total	43,706		43,954		14,712		14,842
From 1 - 5 Years:
U.S. Agency Obligations	40,012		40,334		—		—
State and Municipal Obligations	29,596		29,828		73,414		75,093
Collateralized Mortgage Obligations - Residential	102,520		105,944		—		—
Mortgage-Backed Securities - Residential	198,816		203,183		37,754		37,629
Corporate and Other Debt Securities	28		28		—		—
Total	370,972		379,317		111,168		112,722
From 5 - 10 Years:
State and Municipal Obligations	1,019		1,067		65,382		70,531
Collateralized Mortgage Obligations - Residential	16,032		17,068		—		—
Mortgage-Backed Securities - Residential	19,580		20,644		2,063		2,041
Total	36,631		38,779		67,445		72,572
Over 10 Years:
State and Municipal Obligations	2,502		2,502		6,282		6,643
Corporate and Other Debt Securities	1,000		800		1,000		1,000
Total	3,502		3,302		7,282		7,643
Total Debt Securities	$	454,811	$	465,352	$	200,607	$	207,779

The fair value of securities pledged to secure repurchase agreements amounted to $16,652, $26,293 and $57,762 at March 31, 2012, December 31, 2011 and March 31, 2011, respectively. The fair value of securities pledged to secure public and trust deposits and for other purposes totaled $503,910, $415,542 and $452,417 at March 31, 2012, December 31, 2011 and March 31, 2011, respectively. Other mortgage-backed securities at March 31, 2012, December 31, 2011 and March 31, 2011 included $695, $873 and $1,325, respectively, of loans previously securitized by Arrow, which it continues to service.

Information on temporarily impaired securities at March 31, 2012, December 31, 2011 and March 31, 2011, segregated according to the length of time such securities had been in a continuous unrealized loss position, is summarized as follows:



March 31, 2012	Less than 12 Months				12 Months or Longer				Total
Available-for-Sale Portfolio:	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
State & Municipal Obligations	$	2,831	$	12	$	—	$	—	$	2,831	$	12
Collateralized Mortgage Obligations - Residential	14,205		152		—		—		14,205		152
Corporate and Other Debt Securities	800		200		—		—		800		200
Mutual Funds and Equity Securities	39		6		—		—		39		6
Total Securities Available-for-Sale	$	17,875	$	370	$	—	$	—	$	17,875	$	370
Held-to-Maturity Portfolio
State & Municipal Obligations	$	11,719	$	96	$	—	$	—	$	11,719	$	96
Mortgage-Backed Securities - Residential	33,704		164		—		—		33,704		164
Total Securities Held-to-Maturity	$	45,423	$	260	$	—	$	—	$	45,423	$	260

The table above for March 31, 2012 consists of 63 securities where the current fair value is less than the related amortized cost. These unrealized losses do not reflect any deterioration of the credit worthiness of the issuing entities. U.S. Agency issues, including agency-backed collateralized mortgage obligations and mortgage-backed securities, are all rated Aaa by Moody's and AA+ by Standard and Poor's. The state and municipal obligations are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. Obligations issued by school districts are supported by state aid. For any non-rated municipal securities, credit analysis is performed in-house based upon data that has been submitted by the issuers to the NY State Comptroller. That analysis shows no deterioration in the credit worthiness of the municipalities. Subsequent to March 31, 2012, there were no securities downgraded below investment grade.

The unrealized losses on these temporarily impaired securities are primarily the result of changes in interest rates for fixed rate securities where the interest rate received is less than the current rate available for new offerings of similar securities, changes in market spreads as a result of shifts in supply and demand, and/or changes in the level of prepayments for mortgage related securities. Because we do not currently intend to sell any of our temporarily impaired securities, and because it is not more likely-than-not we would be required to sell the securities prior to recovery, the impairment is considered temporary.



December 31, 2011	Less than 12 Months				12 Months or Longer				Total
Available-for-Sale Portfolio:	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Agency Securities	$	25,956	$	4	$	—	$	—	$	25,956	$	4
State & Municipal Obligations	4,505		18		—		—		4,505		18
Collateralized Mortgage Obligations - Residential	9,857		204		5,715		15		15,572		219
Mutual Funds and Equity Securities	—		—		78		15		78		15
Total Securities Available-for-Sale	$	40,318	$	226	$	5,793	$	30	$	46,111	$	256
Held-to-Maturity Portfolio
State & Municipal Obligations	$	510	$	7	$	—	$	—	$	510	$	7

The table above for December 31, 2011 consists of 27 securities where the current fair value is less than the related amortized cost. These unrealized losses do not reflect any deterioration of the credit worthiness of the issuing entities. U.S. Agency issues, including agency-backed collateralized mortgage obligations and mortgage-backed securities, are all rated Aaa by Moody's and AA+ by Standard and Poor's. The state and municipal obligations are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. Obligations issued by school districts are supported by state aid. For any non-rated municipal securities, credit analysis is performed in-house based upon data that has been submitted by the issuers to the NY State Comptroller. That analysis shows no deterioration in the credit worthiness of the municipalities. Subsequent to December 31, 2011, there were no securities downgraded below investment grade.



March 31, 2011	Less than 12 Months				12 Months or Longer				Total
Available-for-Sale Portfolio:	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Agency Securities	$	52,909	$	87	$	—	$	—	$	52,909	$	87
State & Municipal Obligations	6,481		11		—		—		6,481		11
Collateralized Mortgage Obligations - Residential	24,335		503		1,069		2		25,404		505
Mortgage-Backed Securities - Residential	96,520		1,688		5,410		31		101,930		1,719
Corporate & Other Debt Securities	—		—		309		22		309		22
Mutual Funds and Equity Securities	—		—		1,115		27		1,115		27
Total Securities Available-for-Sale	$	180,245	$	2,289	$	7,903	$	82	$	188,148	$	2,371
Held-to-Maturity Portfolio
State & Municipal Obligations	$	—	$	—	$	10,167	$	161	$	10,167	$	161

The table above for March 31, 2011 consists of 93 securities where the current fair value is less than the related amortized cost. These unrealized losses do not reflect any deterioration of the credit worthiness of the issuing entities. U.S. Agency issues, including agency-backed collateralized mortgage obligations and mortgage-backed securities are all rated AAA. The state and municipal obligations are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. Obligations issued by school districts are supported by state aid. For any non-rated municipal securities, third party credit analysis shows no deterioration in the credit worthiness of the municipalities. Corporate and other debt securities consist of one private placement trust preferred, and one trust preferred pool. The private placement trust preferred is rated AAA by Standard & Poor’s; the trust preferred pool is rated investment grade, with the privately issued securities securing the note performing. Subsequent to March 31, 2011, there were no securities downgraded below investment grade.