Investment Securities (Tables)

9 Months Ended

Sep. 30, 2013

A summary of the amortized cost and market value of securities available for sale and securities held to maturity at September 30, 2013 and December 31, 2012 is as follows:

	At September 30, 2013
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	122,657	$	521	$	(2,760	)	$	120,418
Mortgage-backed securities		15,007		634		(55	)		15,586
Municipal securities		8,004		97		(99	)		8,002
Corporate bonds		32,188		805		-			32,993
Asset-backed securities		19,234		324		-			19,558
Trust preferred securities		5,345		-		(2,297	)		3,048
Other securities		115		2		-			117
Total securities available for sale	$	202,550	$	2,383	$	(5,211	)	$	199,722

U.S. Government agencies	$	1	$	-	$	-		$	1
Other securities		68		-		-			68
Total securities held to maturity	$	69	$	-	$	-		$	69

	At December 31, 2012
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	97,959	$	1,830	$	(6	)	$	99,783
Mortgage-backed securities		20,626		1,014		-			21,640
Municipal securities		11,150		967		(16	)		12,101
Corporate bonds		32,231		639		(185	)		32,685
Asset-backed securities		19,785		135		(191	)		19,729
Trust preferred securities		5,785		-		(2,598	)		3,187
Other securities		131		3		-			134
Total securities available for sale	$	187,667	$	4,588	$	(2,996	)	$	189,259

U.S. Government agencies	$	1	$	-	$	-		$	1
Other securities		66		2		-			68
Total securities held to maturity	$	67	$	2	$	-		$	69

Investments Classified by Contractual Maturity Date

The maturity distribution of the amortized cost and estimated market value of investment securities by contractual maturity at September 30, 2013 is as follows:

	Available for Sale				Held to Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value

Due in 1 year or less	$	18,899	$	19,173	$	48	$	48
After 1 year to 5 years		64,862		64,836		21		21
After 5 years to 10 years		110,860		107,567		-		-
After 10 years		7,929		8,146		-		-
Total	$	202,550	$	199,722	$	69	$	69

Schedule of Credit-Related Impairment Losses on Securities

The following table presents a roll-forward of the balance of credit-related impairment losses on securities held at September 30, 2013 and 2012 for which a portion of OTTI was recognized in other comprehensive income:

	September 30,
(dollars in thousands)	2013		2012

Beginning Balance, January 1st	$	3,959	$	3,925
Additional credit-related impairment loss on securities for which an
other-than-temporary impairment was previously recognized		-		31
Reductions for securities paid off during the period		-		-
Reductions for securities for which the amount previously recognized in other
comprehensive income was recognized in earnings because the Company
intends to sell the security		-		-
Ending Balance, September 30th	$	3,959	$	3,956

Schedule of Unrealized Loss on Investments

The following tables show the fair value and gross unrealized losses associated with the investment portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	At September 30, 2013
	Less than 12 months					12 months or more				Total
(dollars in thousands)	Fair Value			Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Collateralized mortgage obligations		$	80,855	$	2,760	$	-	$	-	$	80,855	$	2,760
Mortgage-backed securities			1,160		55		-		-		1,160		55
Municipal securities			2,344		99		-		-		2,344		99
Corporate bonds			-		-		-		-		-		-
Trust preferred securities			-		-		3,048		2,297		3,048		2,297
U.S. Government Agencies			1		-		-		-		1		-
Total		$	84,360	$	2,914	$	3,048	$	2,297	$	87,408	$	5,211

	At December 31, 2012
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Collateralized mortgage obligations	$	9,991	$	6	$	-	$	-	$	9,991	$	6
Municipal securities		1,050		16		-		-		1,050		16
Corporate bonds		-		-		9,811		185		9,811		185
Asset-backed securities		9,218		191		-		-		9,218		191
Trust preferred securities		-		-		3,187		2,598		3,187		2,598
Total	$	20,259	$	213	$	12,998	$	2,783	$	33,257	$	2,996

Schedule of Trust Preferred Securities

The following table provides additional detail about the trust preferred securities held in the portfolio as of September 30, 2013.


(dollars in thousands)	Class / Tranche	Amortized Cost		Fair Value		Unrealized Losses			Lowest Credit Rating Assigned		Number of Banks Currently Performing		Deferrals / Defaults as % of Current Balance			Conditional Default Rates for 2013 and beyond			Cumulative OTTI Life to Date
Preferred Term Securities IV	Mezzanine Notes	$	49	$	40	$	(9	)	Caa2			6		18	%		0.37	%	$	-
Preferred Term Securities VII	Mezzanine Notes		1,056		780		(276	)		C		12		53			0.34			2,173
TPREF Funding II	Class B Notes		739		362		(377	)		C		16		44			0.36			260
TPREF Funding III	Class B2 Notes		1,521		782		(739	)		C		17		34			0.34			480
Trapeza CDO I, LLC	Class C1 Notes		556		271		(285	)		C		9		49			0.38			470
ALESCO Preferred Funding IV	Class B1 Notes		604		361		(243	)		C		38		14			0.36			396
ALESCO Preferred Funding V	Class C1 Notes		820		452		(368	)		C		38		24			0.36			180
Total		$	5,345	$	3,048	$	(2,297	)				136		33	%				$	3,959

- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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