SECURITIES

12 Months Ended

Dec. 31, 2011

SECURITIES

SECURITIES

NOTE 4 — SECURITIES

        The fair value of securities available for sale and related gross unrealized gains and losses recognized in accumulated other comprehensive income was as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
As of December 31, 2011
Available for Sale
State and municipal	$	320,269	$	24,723	$	(115	)	$	344,877
Mortgage-backed securities-residential (Government Sponsored Entity)		264,619		7,074		(189	)		271,504
Collateralized mortgage obligations (Government Sponsored Entity)		246,985		3,807		(25	)		250,767
Equity securities		5,410		—		—			5,410
Other securities		3,589		—		(57	)		3,532
Total available for sale	$	840,872	$	35,604	$	(386	)	$	876,090
As of December 31, 2010
Available for Sale
State and municipal	$	294,706	$	7,193	$	(1,755	)	$	300,144
Mortgage-backed securities-residential (Government Sponsored Entity)		304,347		9,513		(1,029	)		312,831
Collateralized mortgage obligations (Government Sponsored Entity)		184,549		3,129		(1,681	)		185,997
Equity securities		4,405		—		—			4,405
Other securities		3,514		—		(820	)		2,694
Total available for sale	$	791,521	$	19,835	$	(5,285	)	$	806,071

        Contractual maturities of securities at December 31, 2011 were as follows. Securities not due at a single maturity or with no maturity at year end are shown separately.

			Available for Sale
	Amortized Cost
			Fair Value
Within one year	$	3,360	$	3,415
One through five years		51,737		54,088
Six through ten years		90,425		97,337
After ten years		178,336		193,569
Mortgage-backed securities-residential (Government Sponsored Entity)		264,619		271,504
Collateralized mortgage obligations		246,985		250,767
Equity securities		5,410		5,410
Total available for sale securities	$	840,872	$	876,090

        Gross proceeds from sales of securities available for sale during 2011, 2010 and 2009 were $366,559, $111,564, and $93,855. Gross gains of $11,440, $3,018 and $1,518 and gross losses of $83, $39, and $255 were realized on those sales in 2011, 2010 and 2009, respectively. The tax provision related to these net realized gains was $3,861, $1,049, and $495 respectively.

        Securities with a carrying value of $206,639 and $307,597 were pledged at December 31, 2011 and 2010 to secure certain deposits and repurchase agreements, secure future funding needs, and for other purposes as permitted or required by law.

        At year end 2011 and 2010, there were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders' equity.

        Below is a summary of securities with unrealized losses as of year-end 2011 and 2010 presented by length of time the securities have been in a continuous unrealized loss position.

2011	Less than 12 months					12 months or longer					Total
Description of securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
State and municipal	$	1,576	$	(72	)	$	237	$	(43	)	$	1,813	$	(115	)
Mortgage-backed securities-residential (GSE's)		50,493		(189	)		—		—			50,493		(189	)
Collateralized mortgage obligations (GSE's)		25,527		(25	)		—		—			25,527		(25	)
Other securities		945		(57	)		—		—			945		(57	)
Total temporarily impaired	$	78,541	$	(343	)	$	237	$	(43	)	$	78,778	$	(386	)
2010	Less than 12 months					12 months or longer					Total
Description of securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
State and municipal	$	69,009	$	(1,664	)	$	406	$	(91	)	$	69,415	$	(1,755	)
Mortgage-backed securities-residential (GSE's)		42,926		(1,029	)		—		—			42,926		(1,029	)
Collateralized mortgage obligations (GSE's)		70,656		(1,681	)		—		—			70,656		(1,681	)
Other securities		1,010		(2	)		1,684		(818	)		2,694		(820	)
Total temporarily impaired	$	183,601	$	(4,376	)	$	2,090	$	(909	)	$	185,691	$	(5,285	)

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. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under ASC 320. However, certain purchased beneficial interests, including non-agency mortgage-backed securities, asset-backed securities, and collateralized debt obligations, that had credit ratings at the time of purchase of below AA are evaluated using the model outlined in ASC 325-10 (formerly EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transfer in Securitized Financial Assets). The Company holds no securities that fall within the scope of ASC 325-10.

        In determining OTTI under ASC 320, management considers many factors, 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 affected by macroeconomic conditions, and (4) whether the entity 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 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 under either model, the amount of the OTTI recognized in earnings depends on whether the Company 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, less any current period credit loss. 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, less any current period credit loss, 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. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

        As of December 31, 2011, the Company's security portfolio consisted of 1,016 securities, 13 of which were in an unrealized loss position. Unrealized losses on state and municipal securities have not been recognized into income because management has the ability to hold for a period of time sufficient to allow for any anticipated recovery in fair value and it is unlikely that management will be required to sell the securities before their anticipated recovery. The decline in value is primarily attributable to temporary illiquidity and the financial crisis affecting these markets and not the expected cash flows of the individual securities. The fair value of these debt securities is expected to recover as the securities approach their maturity date.

        At December 31, 2011, almost all of the mortgage-backed securities held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Fannie Mae and Freddie Mac, institutions which the government has affirmed its commitment to support. Because the decline in fair value of approximately $0.2 million 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 other-than-temporarily impaired at December 31, 2011.

        The Company's collateralized mortgage obligation securities portfolio includes agency collateralized mortgage obligations with a market value of $250,767 which had unrealized losses of approximately $25 at December 31, 2011. The Company monitors to insure it has adequate credit support and as of December 31, 2011, the Company believes there is no OTTI and does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. All securities are investment grade.

        The unrealized losses on other securities are related to one single issue trust preferred security and has not been recognized into income because management has the ability to hold for a period of time sufficient to allow for any anticipated recovery in fair value and it is unlikely that management will be required to sell the security before its anticipated recovery. The Company performs a quarterly review of this security and based on this review, no evidence of adverse changes in expected cash flows is anticipated. The decline in value is primarily attributable to temporary illiquidity and the financial crisis affecting these markets and not the expected cash flows of the individual security. Currently, the issuer has made all contractual payments and given no indication that they will not be able to make them into the future. The fair value of these debt securities is expected to recover as the securities approach their maturity date. As of December 31, 2011, the Company owned $945 of these securities with an unrealized loss of $57.

        During 2010, the Company determined that three of its equity holdings were other than temporarily impaired and wrote down the securities by $97 to their fair value of $136. During 2009, the Company identified one of its equity holdings to be other than temporarily impaired and wrote down the security by $150 to its fair value ($0). These amounts were included in other income in 2010 and net realized gains/(losses) on securities in 2009.