Investments

6 Months Ended

Jun. 30, 2011

Investments

Investments

Note 5 - Investments

The amortized cost and estimated fair value of investment securities available for sale as of June 30, 2011 and December 31, 2010 are:

(Dollars in thousands)			Gross		Gross
	Amortized		unrealized		unrealized			Fair
June 30, 2011	cost		gains		losses			Value
Equity securities	$	3,256	$	182	$	(524	)	$	2,914
Obligations of U.S. Government agencies		17,307		94		(27	)		17,374
Obligations of state and political subdivisions		39,172		1,610		(27	)		40,755
Corporate debt securities		2,537		56		(42	)		2,551
Trust Preferred securities		5,884		-		(896	)		4,988
Mortgage-backed securities
Agency		59,371		1,110		(187	)		60,294
Non-Agency		3,842		19		(339	)		3,522
Asset-backed securities		70		-		(19	)		51
	$	131,439	$	3,071	$	(2,061	)	$	132,449

			Gross		Gross
(Dollars in thousands)	Amortized		unrealized		unrealized			Fair
December 31, 2010	cost		gains		losses			Value
Equity securities	$	4,126	$	50	$	(538	)	$	3,638
Obligations of U.S. Government agencies		14,780		61		(56	)		14,785
Obligations of state and political subdivisions		39,477		894		(419	)		39,952
Corporate debt securities		2,647		64		(46	)		2,665
Trust Preferred securities		5,875		-		(1,678	)		4,197
Mortgage-backed securities
Agency		47,239		1,104		(46	)		48,297
Non-Agency		4,424		20		(415	)		4,029
Asset-backed securities		74		-		(21	)		53
	$	118,642	$	2,193	$	(3,219	)	$	117,616

The amortized cost of securities pledged as collateral to secure various funding sources was $122.4 million at June 30, 2011 and $108.7 million at December 31, 2010.

The amortized cost and fair value of debt securities as of June 30, 2011, by contractual maturity are shown below. Actual maturities may differ from contractual maturities because of prepayment or call options embedded in the securities.

	Amortized		Fair
(Dollars in thousands)	cost		Value
Due in one year or less	$	4,870	$	4,891
Due after one year through five years		16,486		17,018
Due after five years through ten years		14,209		14,828
Due after ten years		29,405		28,982
		64,970		65,719
Mortgage-backed securities		63,213		63,816
	$	128,183	$	129,535

At June 30, 2011, the investment portfolio contained 66 securities with $33.1 million of temporarily impaired fair value and $2.1 million in unrealized losses. This position is improved from year-end 2010 when there were 85 securities with an unrealized loss of $3.2 million. Nearly every sector realized an improvement in the level of unrealized loss with the trust preferred investment category showing the largest improvement as its unrealized loss declined from $1.7 million at year-end to $896 thousand at June 30, 2011.

The following table reflects temporary impairment in the investment portfolio (excluding restricted stock), aggregated by investment category, length of time that individual securities have been in a continuous unrealized loss position and the number of securities in each category as of June 30, 2011 and December 31, 2010:

	June 30, 2011
	Less than 12 months							12 months or more							Total
	Fair		Unrealized					Fair		Unrealized					Fair		Unrealized
(Dollars in thousands)	Value		Losses			Number		Value		Losses			Number		Value		Losses			Number
Equity securities	$	1	$	(1	)		1	$	1,862	$	(523	)		20	$	1,863	$	(524	)		21
Obligations of U.S. Government agencies		33		(1	)		1		6,206		(26	)		12		6,239		(27	)		13
Obligations of state and political subdivisions		1,740		(21	)		4		300		(6	)		1		2,040		(27	)		5
Corporate debt securities		-		-			-		1,968		(42	)		2		1,968		(42	)		2
Trust Preferred securities		-		-			-		4,988		(896	)		7		4,988		(896	)		7
Mortgage-backed securities
Agency		14,034		(187	)		11		-		-			-		14,034		(187	)		11
Non-Agency		-		-			-		1,940		(339	)		4		1,940		(339	)		4
Asset-backed securities		-		-			-		51		(19	)		3		51		(19	)		3
Total temporarily impaired securities	$	15,808	$	(210	)		17	$	17,315	$	(1,851	)		49	$	33,123	$	(2,061	)		66

	December 31, 2010
	Less than 12 months							12 months or more							Total
	Fair		Unrealized					Fair		Unrealized					Fair		Unrealized
(Dollars in thousands)	Value		Losses			Number		Value		Losses			Number		Value		Losses			Number
Equity securities	$	1	$	(1	)		1	$	3,261	$	(537	)		20	$	3,262	$	(538	)		21
Obligations of U.S. Government agencies		3,476		(17	)		2		6,433		(39	)		14		9,909		(56	)		16
Obligations of state and political subdivisions		11,861		(405	)		24		292		(14	)		1		12,153		(419	)		25
Corporate debt securities		-		-			-		1,968		(46	)		2		1,968		(46	)		2
Trust Preferred securities		-		-			-		4,196		(1,678	)		7		4,196		(1,678	)		7
Mortgage-backed securities
Agency		9,859		(46	)		6		-		-			-		9,859		(46	)		6
Non-Agency		-		-			-		2,676		(415	)		5		2,676		(415	)		5
Asset-backed securities		-		-			-		53		(21	)		3		53		(21	)		3
Total temporarily impaired securities	$	25,197	$	(469	)		33	$	18,879	$	(2,750	)		52	$	44,076	$	(3,219	)		85

The following table provides additional detail about trust preferred securities as of June 30, 2011:

Trust Preferred Securities
(Dollars in thousands)
Deal Name	Single Issuer or Pooled	Class	Amortized Cost		Fair Value		Gross Unrealized Gain (Loss)			Lowest Credit Rating Assigned	Number of Banks Currently Performing	Deferrals and Defaults as % of Original Collateral	Expected Deferral/ Defaults as a Percentage of Remaining Performing Collateral
Huntington Cap Trust	Single	Preferred Stock	$	929	$	781	$	(148	)	B	1	None	None
Huntington Cap Trust II	Single	Preferred Stock		874		749		(125	)	B	1	None	None
BankAmerica Cap III	Single	Preferred Stock		956		781		(175	)	BB	1	None	None
Wachovia Cap Trust II	Single	Preferred Stock		273		249		(24	)	Baa2	1	None	None
Corestates Captl Tr II	Single	Preferred Stock		924		822		(102	)	Baa1	1	None	None
Chase Cap VI JPM	Single	Preferred Stock		957		822		(135	)	BBB	1	None	None
Fleet Cap Tr V	Single	Preferred Stock		971		784		(187	)	BB	1	None	None
			$	5,884	$	4,988	$	(896	)

The following table provides additional detail about private label mortgage-backed securities as of June 30, 2011:

Private Label Mortgage Backed Securities
(Dollars in thousands)
						Gross						Cummulative
	Orgination	Amortized		Fair		Unrealized			Collateral	Lowest Credit	Credit	OTTI
Decscription	Date	Cost		Value		Gain (Loss)			Type	Rating Assigned	Support %	Charges
RALI 2003-QS15 A1	8/1/2003	$	366	$	366	$	-		ALT A	A1	11.26	$	-
RALI 2004-QS4 A7	3/1/2004		516		518		2		ALT A	AA	12.53		-
MALT 2004-6 7A1	6/1/2004		681		698		17		ALT A	BB	10.90		-
RALI 2005-QS2 A1	2/1/2005		602		550		(52	)	ALT A	CCC	7.31		-
RALI 2006-QS4 A2	4/1/2006		869		715		(154	)	ALT A	D	-		218
GSR 2006-5F 2A1	5/1/2006		352		283		(69	)	Prime	CCC	3.81		-
RALI 2006-QS8 A1	7/28/2006		456		392		(64	)	ALT A	D	-		172
		$	3,842	$	3,522	$	(320	)				$	390

For more information concerning investments, refer to the Investment Securities discussion in the Financial Condition section of Management's Discussion and Analysis.