Note 3: Securities Available for Sale

The Company classifies all of its investment securities as available for sale. The following summary sets forth the amortized cost and the corresponding fair value of investment securities available for sale at September 30, 2012 and December 31, 2011:

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

September 30, 2012
U.S. Treasury securities	$	504	$	5	$	0	$	509
Obligations of U.S. Government sponsored enterprises		172,834		1,180		161		173,853
Obligations of states and political subdivisions		880		2		0		882
Mortgage-backed securities		320,081		3,472		1,191		322,362
Total	$	494,299	$	4,659	$	1,352	$	497,606

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

December 31, 2011
U.S. Treasury securities	$	507	$	6	$	0	$	513
Obligations of U.S. Government sponsored enterprises		181,624		181		185		181,620
Obligations of states and political subdivisions		1,325		4		0		1,329
Mortgage-backed securities		329,853		4,902		1,004		333,751
Total	$	513,309	$	5,093	$	1,189	$	517,213

Securities available for sale with a carrying value of approximately $200.315 million at September 30, 2012 and $254.042 million at December 31, 2011 were pledged to secure deposits of public funds and trust deposits.

For the nine months ended September 30, 2012, proceeds from the sales of securities available for sale were $272.900 million. Gross realized gains on the sale of these securities were $3.808 million, and gross realized losses were $725 thousand. For the nine months ended September 30, 2011, proceeds from the sales of securities available for sale were $136.532 million. Gross realized gains on the sale of these securities were $2.449 million and there were no gross realized losses. The Company recorded an other-than-temporary impairment charge of $50 thousand in the first nine months of 2011. No such charge was recorded during the first nine months of 2012.

Maturities of securities available for sale as of September 30, 2012, were as follows:

(in thousands)	Amortized Cost		Fair Value

Due in 1 year or less	$	26,117	$	26,249
Due in 1 to 5 years		20,664		20,727
Due in 5 to 10 years		42,812		43,184
Due in over 10 years		84,625		85,084
Mortgage-backed securities		320,081		322,362
Total	$	494,299	$	497,606

The following table shows the Company's combined gross unrealized losses on, and fair value of, investment securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2012 and December 31, 2011.

(in thousands)	September 30, 2012
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Obligations of U.S. Government sponsored enterprises	$	18,052	$	161	$	0	$	0	$	18,052	$	161
Mortgage-backed securities		84,908		637		7,277		554		92,185		1,191
Total	$	102,960	$	798	$	7,277	$	554	$	110,237	$	1,352


	December 31, 2011
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Obligations of U.S. Government sponsored enterprises	$	69,852	$	166	$	6,207	$	19	$	76,059	$	185
Mortgage-backed securities		57,615		268		2,789		736		60,404		1,004
Total	$	127,467	$	434	$	8,996	$	755	$	136,463	$	1,189

At September 30, 2012, the Company had 16 investment securities that were in an unrealized loss position or impaired for the less than 12 months time frame and 2 investment securities in an unrealized loss position or impaired for the more than 12 months time frame. The Company has one bond whose impairment was deemed in 2009 and again in 2011 to be other-than-temporary. All other investment securities' impairments are deemed by Management to be temporary. All mortgage-backed securities are backed by one-to-four-family mortgages, and approximately 99.1 percent of the mortgage-backed securities represent U.S. Government-sponsored enterprise securities. These securities have fluctuated with the changes in market interest rates on home mortgages. Additionally, the fair value of the Company’s only non-U.S. government-sponsored enterprise mortgage-backed security has been negatively affected by liquidity risk considerations and by concerns about potential default and delinquency risk of the underlying individual mortgage loans. The Company concluded in 2009 and again in 2011 that a portion of its unrealized loss position of this security is other-than-temporary. Accordingly, the Company recorded an impairment charge related to potential credit loss of $400 thousand in 2009 and $200 thousand in 2011 on this security. The amount related to credit loss was determined based on a discounted cash flow method that takes into account several factors including default rates, prepayment rates, delinquency rates, and foreclosure and loss severity of the underlying collateral. Changes in these factors in the future could result in an increase in the amount deemed to be credit-related other-than-temporary impairment, which would result in the Company recognizing additional impairment charges to earnings for this security. Additionally, the Company recorded $522 thousand and $736 thousand in accumulated other comprehensive loss (pre-tax) related to this security at September 30, 2012 and December 31, 2011, respectively. No credit-related other-than-temporary impairment occurred during the nine-month period ended September 30, 2012. Management will continue to closely monitor this security. The security has an estimated fair value of $2.774 million and represents 94.10 percent of the unrealized losses at September 30, 2012 in the greater than 12 months category. Management believes that the fair value of obligations of U.S. government sponsored enterprises and obligations of state and political subdivisions has changed due to current market conditions and not due to credit concerns related to the issuers of the securities. The Company does not believe any credit-related other-than-temporary impairments exist related to these investment securities. As of September 30, 2012, there was no intent to sell any of the securities classified as available for sale. Furthermore, Management does not believe it is likely that the Company will be required to sell such securities before a recovery of the carrying value.

The following table summarizes the changes in the amount of credit losses on the Company's investment securities recognized in earnings for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2012		2011		2012		2011


Beginning balance of credit losses previously recognized in earnings	$	600	$	400	$	600	$	400
Amount related to credit loss for securities as to which an other-than-temporary impairment was not previously recognized in earnings		0		0		0		0
Amount related to credit loss for securities as to which an other-than-temporary impairment was recognized in earnings		0		50		0		50
Ending balance of cumulative credit losses recognized in earnings	$	600	$	450	$	600	$	450