(3) Securities

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

December 31, 2012	Amortized		Unrealized
Securities available for sale	Cost		Gains		Losses		Fair Value
(in thousands)

U.S. Treasury and other U.S. government obligations	$	98,000	$	—	$	—	$	98,000
Government sponsored enterprise obligations	83,015		2,789		56		85,748
Mortgage-backed securities	137,407		3,594		120		140,881
Obligations of states and political subdivisions	57,961		2,844		12		60,793
Trust preferred securities of financial institutions	1,000		18		—		1,018

Total securities available for sale	$	377,383	$	9,245	$	188	$	386,440

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

No securities were sold in 2012 or 2011. There are no securities held to maturity as of December 31, 2012 or 2011.

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 with a government agency security of similar duration.

Bancorp reviewed the investment in FHLB Stock as of December 31, 2012, considering the FHLB equity position, its continuance of dividend payments, liquidity position, and positive year-to-date net income. Based on this review, Bancorp is of the opinion that its investment in FHLB stock is not impaired.

A summary of the available for sale investment securities by maturity groupings as of December 31, 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	$	129,136	$	129,251
Due after 1 but within 5 years	69,706		72,746
Due after 5 but within 10 years	27,354		29,585
Due after 10 years	13,780		13,977
Mortgage-backed securities	137,407		140,881

Total securities available for sale	$	377,383	$	386,440

Securities with a carrying value of approximately $158.2 million at December 31, 2012 and $125.4 million at December 31, 2011 were pledged to secure the accounts of commercial depositors in cash management accounts, public deposits, and cash balances for certain investment management and trust accounts.

At year end 2012 and 2011, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

Securities with unrealized losses at December 31, 2012 and 2011, not recognized in income are 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, 2012
Government sponsored enterprise obligations	$	29,996	$	56	$	—	$	—	$	29,996	56
Mortgage-backed securities	16,609		120		$	—	$	—	$	16,609	$	120
Obligations of states and political subdivisions	2,292		12		—		—		2,292		12
Total temporarily impaired securities	$	48,897	$	188	$	—	$	—	$	48,897	$	188

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

Unrealized losses on Bancorp’s investment securities portfolio have not been recognized in income because the securities are of high credit quality, and the decline in fair values is largely due to changes in the prevailing interest rate environment since the purchase date. The fair value is expected to recover as the securities reach their maturity date and/or the interest rate environment returns to conditions similar to when the securities were purchased. These investments consist of 14 and 5 separate investment positions as of December 31, 2012 and 2011, respectively. Because management does not intend to sell the investments, and it is not likely that Bancorp will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, Bancorp does not consider these securities to be other-than-temporarily impaired at December 31, 2012.