2	Securities

The following table sets forth the amortized cost, gross unrealized gains and losses and the estimated fair value of securities classified as available for sale and held to maturity at December 31:


	2013								2012
	Amortized Cost		Gross Unrealized				Estimated Fair Value		Amortized Cost		Gross Unrealized				Estimated Fair Value
	Amortized Cost		Gains		Losses		Estimated Fair Value		Amortized Cost		Gains		Losses		Estimated Fair Value
	(In thousands)
Classified as Available for Sale
U.S. Treasury and government agencies	$	94,427	$	35	$	770	$	93,692	$	53,197	$	36	$	10	$	53,223
Mortgage-backed securities — residential		349,216		2,211		11,732		339,695		290,063		5,337		312		295,088
Obligations of states and political subdivisions		87,884		1,520		100		89,304		79,638		2,974		10		82,602
Other debt securities		9,529		4		4		9,529		11,319		1		7,572		3,748

Total debt securities		541,056		3,770		12,606		532,220		434,217		8,348		7,904		434,661
Mutual funds and other equity securities		9,729		636		387		9,978		10,026		507		124		10,409

Total	$	550,785	$	4,406	$	12,993	$	542,198	$	444,243	$	8,855	$	8,028	$	445,070


	Amortized Cost		Gross Unrecognized				Estimated Fair Value		Amortized Cost		Gross Unrecognized				Estimated Fair Value
	Amortized Cost		Gains		Losses		Estimated Fair Value		Amortized Cost		Gains		Losses		Estimated Fair Value
	(In thousands)
Classified as Held To Maturity
Mortgage-backed securities — residential	$	3,133	$	249		—	$	3,382	$	5,083	$	415		—	$	5,498
Obligations of states and political subdivisions		3,105		69		—		3,174		5,142		185		—		5,327

Total	$	6,238	$	318		—	$	6,556	$	10,225	$	600		—	$	10,825

Included in other debt securities were investments in five pooled trust preferred securities. The value of these investments had been severely negatively affected by the economic downturn of recent years and the resulting investor concerns about recent and future losses in the financial services industry. In December 2013, a joint federal bank regulatory agency statement was issued noting that they were reviewing certain provisions of the Dodd-Frank Act and other related regulations regarding whether it should be permissible for banks to continue to hold investments in collateralized debt obligations, including trust preferred securities. As a result of the joint statement, liquidity in the market for pooled trust preferred securities improved greatly as holders evaluated their positions in light of a potential regulatory mandate to divest. The Company sought and reviewed offers for its holdings and, based on the significant improvement in the market and the uncertainty of being able to hold these investments to maturity, decided to sell the entire portfolio in early January 2014, prior to the federal agencies’ interim final rule, for $8,753. Due to this change in intent, the remaining $1,240 difference between the amortized cost and fair value at December 31, 2013 was recognized as other-than-temporary impairment through earnings with no additional gain or loss realized upon completion of the sale in January 2014.

The following table summarizes the change in pretax OTTI credit related losses on securities available for sale for the periods indicated:


	2013		2012			2011
	(In thousands)
Balance at beginning of period:
Total OTTI credit related impairment charges beginning of period	$	10,002	$	9,478		$	9,110
Increase to the amount related to the credit loss for which other-than-temporary impairment was previously recognized		1,240		528			368
Credit related impairment dispositions		—		(4	)		—
Credit related impairment not previously recognized		—		—			—

Balance at end of period:	$	11,242	$	10,002		$	9,478

The Company recorded $1,240, $528 and $368 of pretax impairment charges on securities available-for-sale in 2013, 2012 and 2011, respectively. All of the 2013, 2012 and 2011 charges were related to the Company’s investments in pooled trust preferred securities. These charges represented approximately 12.4 percent, 5.0 percent and 3.2 percent of the book value of the related investments in 2013, 2012 and 2011, respectively. Income tax benefits applicable to impairment charges were $513, $217 and $151 in 2013, 2012 and 2011, respectively.

Gross proceeds from sales of securities available for sale were $789, $9,997 and $1,298 in 2013, 2012 and 2011, respectively. There were no gross pretax gains or losses in 2013 and 2012 as a result of these sales. Sales in 2011 resulted in gross pretax gains of $24 and gross pretax losses of $3. Applicable income taxes relating to such transactions were $8 in 2011.

At December 31, 2013 and 2012, securities having a stated value of approximately $216,051 and $195,142 were pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

The following tables reflect the Company’s investments fair value and gross unrealized loss, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position at the dates indicated:


	Less Than 12 Months				Greater than 12 Months				Total
December 31, 2013	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(In thousands)
Available for sale:
U.S. Treasuries and government agencies	$	53,299	$	761	$	3,469	$	9	$	56,768	$	770
Mortgage-backed securities — residential		240,192		10,593		20,216		1,139		260,408		11,732
Obligations of states and political subdivisions		8,060		94		1,322		6		9,382		100
Other debt securities		203		2		98		2		301		4

Total debt securities		301,754		11,450		25,105		1,156		326,859		12,606
Mutual funds and other equity securities		—		—		8,785		387		8,785		387

Total temporarily impaired securities	$	301,754	$	11,450	$	33,890	$	1,543	$	335,644	$	12,993


	Less Than 12 Months				Greater than 12 Months				Total
December 31, 2012	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(In thousands)
Available for sale:
U.S. Treasuries and government agencies	$	8,048	$	10		—		—	$	8,048	$	10
Mortgage-backed securities — residential		47,211		312		—		—		47,211		312
Obligations of states and political subdivisions		2,963		10		—		—		2,963		10
Other debt securities		367		1	$	2,950	$	7,571		3,317		7,572

Total debt securities		58,589		333		2,950		7,571		61,539		7,904
Mutual funds and other equity securities		12		1		96		123		108		124

Total temporarily impaired securities	$	58,601	$	334	$	3,046	$	7,694	$	61,647	$	8,028

There were no securities classified as held to maturity in an unrealized loss position at December 31, 2013 and 2012.

The total number of securities in the Company’s portfolio that were in an unrealized loss position was 215 and 88 at December 31, 2013 and December 31, 2012, respectively. The Company has determined that it does not intend to sell, or it is more likely than not that it will be required to sell, its securities that are in an unrealized loss position prior to the recovery of its amortized cost basis. The Company believes that its securities continue to have satisfactory ratings, are readily marketable and that current unrealized losses are primarily a result of changes in interest rates. Therefore, management does not consider these investments to be other-than-temporarily impaired at December 31, 2013 and 2012.

The contractual maturity of all debt securities held at December 31, 2013 is shown below. Actual maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call or prepayment penalties.


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Contractual Maturity
Within 1 year	$	24,731	$	24,830		—		—
After 1 year but within 5 years		151,886		152,384	$	3,105	$	3,174
After 5 year but within 10 years		6,470		6,558		—		—
After 10 years		8,753		8,753		—		—
Mortgage-backed securities — residential		349,216		339,695		3,133		3,382

Total	$	541,056	$	532,220	$	6,238	$	6,556