Note 5 — Investment Securities

The following is the amortized cost and fair value of investment securities held to maturity:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
March 31, 2013:
State and municipal obligations	$	14,598	$	957	$	—	$	15,555

December 31, 2012:
State and municipal obligations	$	15,440	$	1,113	$	—	$	16,553

March 31, 2012:
State and municipal obligations	$	16,568	$	1,096	$	—	$	17,664

The following is the amortized cost and fair value of investment securities available for sale:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value
March 31, 2013:
Government-sponsored entities debt *	$	71,408	$	515	$	(121	)	$	71,802
State and municipal obligations	144,979		4,308		(391		)	148,896
Mortgage-backed securities **	283,348		6,585		(191		)	289,742
Corporate stocks	241		172		(1		)	412
	$	499,976	$	11,580	$	(704	)	$	510,852
December 31, 2012:
Government-sponsored entities debt *	$	87,584	$	965	$	(31	)	$	88,518
State and municipal obligations	147,201		5,647		(49		)	152,799
Mortgage-backed securities **	285,800		7,489		(102		)	293,187
Corporate stocks	241		139		(1		)	379
	$	520,826	$	14,240	$	(183	)	$	534,883
March 31, 2012:
Government-sponsored entities debt *	$	65,505	$	985	$	(112	)	$	66,378
State and municipal obligations	39,099		2,942		(33		)	42,008
Mortgage-backed securities **	208,564		5,301		(56		)	213,809
Corporate stocks	240		154		(1		)	393
	$	313,408	$	9,382	$	(202	)	$	322,588

* - Government-sponsored entities holdings are comprised of debt securities offered by Federal Home Loan Mortgage Corporation (“FHLMC”) or Freddie Mac, Federal National Mortgage Association (“FNMA”) or Fannie Mae, FHLB, and Federal Farm Credit Banks (“FFCB”).

** - All of the mortgage-backed securities are issued by government-sponsored entities; there are no private-label holdings.

The following is the amortized cost and fair value of other investment securities:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
March 31, 2013:
Federal Home Loan Bank stock	$	6,163	$	—	$	—	$	6,163
Investment in unconsolidated subsidiaries	1,642		—		—		1,642
	$	7,805	$	—	$	—	$	7,805
December 31, 2012:
Federal Home Loan Bank stock	$	8,126	$	—	$	—	$	8,126
Investment in unconsolidated subsidiaries	1,642		—		—		1,642
	$	9,768	$	—	$	—	$	9,768
March 31, 2012:
Federal Reserve Bank stock	$	7,028	$	—	$	—	$	7,028
Federal Home Loan Bank stock	9,932		—		—		9,932
Investment in unconsolidated subsidiaries	1,332		—		—		1,332
	$	18,292	$	—	$	—	$	18,292

The Company has determined that the investment in FHLB stock is not other than temporarily impaired as of March 31, 2013 and ultimate recoverability of the par value of these investments is probable.

Effective July 1, 2012, the Bank converted its national charter to a state charter and changed its name from SCBT, National Association to SCBT. In conjunction with the charter conversion, the Bank became a non-member bank of the Federal Reserve and liquidated its entire position in Federal Reserve Bank stock on July 2, 2012, with no gain or loss.

The amortized cost and fair value of debt securities at March 31, 2013 by contractual maturity are detailed below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

	Securities				Securities
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	1,924	$	1,955	$	3,946	$	3,981
Due after one year through five years	345		369		13,669		14,011
Due after five years through ten years	8,927		9,523		111,773		114,088
Due after ten years	3,402		3,708		370,588		378,772
	$	14,598	$	15,555	$	499,976	$	510,852

Information pertaining to the Company’s securities with gross unrealized losses at March 31, 2013, December 31, 2012 and March 31, 2012, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is as follows:

	Less Than Twelve Months				Twelve Months or More
	Gross				Gross
	Unrealized		Fair		Unrealized		Fair
(Dollars in thousands)	Losses		Value		Losses		Value
March 31, 2013:
Securities Held to Maturity
State and municipal obligations	$	—	$	—	$	—	$	—

Securities Available for Sale
Government-sponsored entities debt	$	121	$	27,852	$	—	$	—
State and municipal obligations	391		27,502		—		—
Mortgage-backed securities	191		26,765		—		—
Corporate Stocks	1		9		—		—
	$	704	$	82,128	$	—	$	—

December 31, 2012:
Securities Held to Maturity
State and municipal obligations	$	—	$	—	$	—	$	—

Securities Available for Sale
Government-sponsored entities debt	$	31	$	4,963	$	—	$	—
State and municipal obligations	49		9,602		—		—
Mortgage-backed securities	102		13,709		—		—
Corporate stocks	1		9		—		—
	$	183	$	28,283	$	—	$	—

March 31, 2012:
Securities Held to Maturity
State and municipal obligations	$	—	$	—	$	—	$	—

Securities Available for Sale
Government-sponsored entities debt	$	112	$	15,516	$	—	$	—
State and municipal obligations	18		381		15		486
Mortgage-backed securities	56		8,367		—		—
Corporate stocks	—		—		1		9
	$	186	$	24,264	$	16	$	495

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (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) the outlook for receiving the contractual cash flows of the investments, (4) the anticipated outlook for changes in the general level of interest rates, and (5) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value or for a debt security whether it is more-likely-than-not that the Company will be required to sell the debt security prior to recovering its fair value. As part of the Company’s evaluation of its intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers its investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. The Company does not currently intend to sell the securities within the portfolio and it is not more-likely-than-not that the Company will be required to sell the debt securities; therefore, management does not consider these investments to be other-than-temporarily impaired at March 31, 2013. Management continues to monitor all of these securities with a high degree of scrutiny. There can be no assurance that the Company will not conclude in future periods that conditions existing at that time indicate some or all of these securities may be sold or are other than temporarily impaired, which would require a charge to earnings in such periods.