Securities

9 Months Ended

Sep. 30, 2012

Securities

Securities

(2)Securities

The amortized cost, unrealized gains and losses, and fair value of securities available for sale follow:

September 30, 2012	Amortized		Unrealized
Securities available for sale	cost		Gains		Losses		Fair value
(in thousands)
U.S. Treasury and other U.S. government obligations	$	60,000	$	—	$	—	$	60,000
Government sponsored enterprise obligations	103,819		2,853		—		106,672
Mortgage-backed securities	127,272		4,280		—		131,552
Obligations of states and political subdivisions	58,495		3,189		—		61,684
Trust preferred securities of financial institutions	1,000		38		—		1,038
Total securities available for sale	$	350,586	$	10,360	$	—	$	360,946

December 31, 2011	Amortized		Unrealized
Securities available for sale	cost		Gains		Losses		Fair value
(in thousands)
U.S. Treasury and other U.S. government obligations	$	115,001	$	—	$	—	$	115,001
Government sponsored enterprise obligations	43,349		2,837		—		46,186
Mortgage-backed securities	116,954		3,564		23		120,495
Obligations of states and political subdivisions	66,755		2,779		33		69,501
Trust preferred securities of financial institutions	1,000		2		—		1,002
Total securities available for sale	$	343,059	$	9,182	$	56	$	352,185

The investment portfolio includes a significant level of obligations of states and political subdivisions.  The issuers of these bonds are generally school districts or essential-service public works projects.  The issuers are concentrated in Kentucky, with a small percentage in Indiana and Ohio. Each of these securities has a rating of A or better by a recognized bond rating agency.

In addition to the available for sale portfolio, investment securities held by Bancorp include certain securities which are not readily marketable, and are carried at cost. This category includes holdings of Federal Home Loan Bank of Cincinnati (FHLB) stock which are required for borrowing availability and are classified as restricted securities. Other securities consist of a Community Reinvestment Act (CRA) investment which matures in 2014, and is fully collateralized by a government agency security of similar duration.

A summary of the available for sale investment securities by maturity groupings as of September 30, 2012 is shown below. Actual maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations. The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as the FHLMC, FNMA, and GNMA. These securities differ from traditional debt securities primarily in that they may have uncertain principal payment dates and are priced based on estimated prepayment rates on the underlying collateral. Bancorp does not have exposure to subprime originated mortgage-backed or collateralized debt obligation instruments.

Securities available for sale	Amortized cost		Fair value
(in thousands)
Due within 1 year	$	127,449	$	127,602
Due after 1 but within 5 years	62,614		65,142
Due after 5 but within 10 years	32,251		35,612
Due after 10 years	1,000		1,038
Mortgage-backed securities	127,272		131,552
Total securities available for sale	$	350,586	$	360,946

Bancorp had no securities with unrealized losses at September 30, 2012.  Securities with unrealized losses, consisting of five separate investment positions, at December 31, 2011, not recognized in income were as follows:

	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	value		losses		value		losses		value		losses
December 31, 2011
Mortgage-backed securities	$	5,122	$	23	$	—	$	—	5,122		23
Obligations of states and political subdivisions	2,644		17		1,021		16		3,665		33
Total temporarily impaired securities	$	7,766	$	40	$	1,021	$	16	$	8,787	$	56