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Securities
 6 Months Ended
Jun. 30, 2013
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities

Amortized costs and fair values of securities available for sale at June 30, 2013 are summarized as follows:

 
June 30, 2013
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(In Thousands)
Available for Sale
 
 
 
 
 
 
 
U.S. government agencies
$
13,720

 
$
300

 
$
(72
)
 
$
13,948

Obligations of states and
 

 
 

 
 

 
 

political subdivisions
79,309

 
1,921

 
(2,083
)
 
79,147

Mortgage-backed securities:
 

 
 

 
 

 
 

Agency
162,925

 
4,592

 
(954
)
 
166,563

Non-agency
17,529

 
148

 
(186
)
 
17,491

Other asset backed securities
32,283

 
839

 
(89
)
 
33,033

Corporate preferred stock
68

 
2

 
—

 
70

Corporate securities
10,207

 
20

 
(347
)
 
9,880

Total
$
316,041

 
$
7,822

 
$
(3,731
)
 
$
320,132


Amortized costs and fair values of securities available for sale at December 31, 2012 are summarized as follows:

 
December 31, 2012
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(In Thousands)
Available for Sale
 
 
 
 
 
 
 
U.S. government agencies
$
15,391

 
$
459

 
$
(28
)
 
$
15,822

Obligations of states and
 

 
 

 
 

 
 

political subdivisions
74,485

 
3,920

 
(105
)
 
78,300

Mortgage-backed securities:
 

 
 

 
 

 
 

Agency
161,564

 
5,659

 
(280
)
 
166,943

Non-agency
15,310

 
287

 
(18
)
 
15,579

Other asset backed securities
33,648

 
1,079

 
(85
)
 
34,642

Corporate preferred stock
68

 
—

 
(6
)
 
62

Corporate securities
8,730

 
12

 
(633
)
 
8,109

Total
$
309,196

 
$
11,416

 
$
(1,155
)
 
$
319,457



The amortized cost and fair value of securities available for sale as of June 30, 2013, by contractual maturity are shown below.  Maturities may differ from contractual maturities in mortgage-backed, other asset-backed, and corporate securities because the mortgages, loans, and securities underlying the securities may be called or repaid without any penalties.  Therefore, these securities are not included in the maturity categories in the following maturity summary.
 
June 30, 2013
 
Amortized
Cost
 
Fair
Value
 
(In thousands)
Due in one year or less
$
3,677

 
$
3,708

Due after one year through
 

 
 

five years
35,915

 
36,686

Due after five years through
 

 
 

ten years
24,264

 
24,176

Due after ten years
39,380

 
38,405

Mortgage-backed securities
180,454

 
184,054

Other asset backed securities
32,283

 
33,033

Corporate preferred stock
68

 
70

Total
$
316,041

 
$
320,132



Proceeds from the sale of securities during the six months ended June 30, 2013 were $9.9 million and net gains of $373,000 were realized on those sales.  The tax expense applicable to the net realized gains amounted to $127,000.  Additionally, no loss on securities with other than temporary impairment was recognized during the six months ended June 30, 2013.

The carrying value of securities pledged to qualify for fiduciary powers, to secure public monies and for other purposes as required by law amounted to $120.1 million at June 30, 2013.

At June 30, 2013, investments in an unrealized loss position that were temporarily impaired are as follows:

 
 
June 30, 2013
 
 
 
 
(In thousands)
 
 
 
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
 
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
U.S. government agencies
 
$
5,521

 
$
(72
)
 
$
16

 
$
—

 
$
5,537

 
$
(72
)
Obligations of states and
 
 

 
 

 
 

 
 

 
 

 
 

political subdivisions
 
26,468

 
(2,083
)
 
—

 
—

 
26,468

 
(2,083
)
Mortgage backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Agency
 
42,803

 
(844
)
 
2,570

 
(110
)
 
45,373

 
(954
)
Non-agency
 
11,087

 
(186
)
 
—

 
—

 
11,087

 
(186
)
Other asset backed securities
 
333

 
—

 
2,357

 
(89
)
 
2,690

 
(89
)
Corporate securities
 
4,483

 
(97
)
 
4,250

 
(250
)
 
8,733

 
(347
)
Total
 
$
90,695

 
$
(3,282
)
 
$
9,193

 
$
(449
)
 
$
99,888

 
$
(3,731
)

At December 31, 2012, investments in an unrealized loss position that were temporarily impaired are as follows:

 
 
December 31, 2012
 
 
 
 
(In thousands)
 
 
 
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
 
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
U.S. government agencies
 
$
3,850

 
$
(28
)
 
$
16

 
$
—

 
$
3,866

 
$
(28
)
Obligations of states and
 
 

 
 

 
 

 
 

 
 

 
 

political subdivisions
 
6,966

 
(105
)
 
—

 
—

 
6,966

 
(105
)
Mortgage backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Agency
 
24,344

 
(234
)
 
1,241

 
(46
)
 
25,585

 
(280
)
Non-agency
 
3,295

 
(18
)
 
—

 
—

 
3,295

 
(18
)
Other asset backed securities
 
2,791

 
(57
)
 
1,418

 
(28
)
 
4,209

 
(85
)
Corporate preferred stock
 
—

 
—

 
33

 
(6
)
 
33

 
(6
)
Corporate securities
 
—

 
—

 
6,867

 
(633
)
 
6,867

 
(633
)
Total
 
$
41,246

 
$
(442
)
 
$
9,575

 
$
(713
)
 
$
50,821

 
$
(1,155
)


A total of 108 securities have been identified by the Company as temporarily impaired at June 30, 2013.  Of the 108 securities, 107 are investment grade and 1 is speculative grade.  Agency, non-agency mortgage-backed securities, municipal and corporate debt securities make up the majority of temporarily impaired securities at June 30, 2013.  The speculative grade security is a municipal bond.  Market prices change daily and are affected by conditions beyond the control of the Company.  Although the Company has the ability to hold these securities until the temporary loss is recovered, decisions by management may necessitate a sale before the loss is fully recovered.  No such sales are anticipated or required as of June 30, 2013.  Investment decisions reflect the strategic asset/liability objectives of the Company.  

Trust preferred securities

As of June 30, 2013, the Company held no trust preferred securities in its investment portfolio.

The Company previously held trust preferred securities that were identified as other-than-temporarily impaired. These securities were sold during the second quarter of 2012 with a recognized net loss of approximately $142,000. Additionally, these securities incurred cumulative other-than-temporary credit losses recognized in prior period earnings of approximately $2.4 million through December 31, 2011.

The Company also previously held one trust preferred security that was not considered other-than-temporarily impaired while held in its investment portfolio. The security was sold during the third quarter of 2012 with a recognized net loss of approximately $149,000. No credit losses were recognized on this security while held.

Other-than-temporary impairment losses

At June 30, 2013, the Company concluded that no adverse change in cash flows occurred during the quarter and did not consider any portfolio securities to be other-than-temporarily impaired.  Based on this analysis and because the Company does not intend to sell securities prior to maturity and it is more likely than not the Company will not be required to sell any securities before recovery of amortized cost basis, which may be at maturity; and, for debt securities related to corporate securities, determined that there was no other adverse change in the cash flows as viewed by a market participant, the Company does not consider the investments in these assets to be other than temporarily impaired at June 30, 2013.  However, there is a risk that the Company’s continuing reviews could result in recognition of other-than-temporary impairment charges in the future. During the six months ended June 30, 2013 and the six months ended June 30, 2012, no credit related impairment losses were recognized by the Company.