(3) Securities

The composition of our securities portfolio (all AFS) is as follows:

	June 30, 2013
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(dollars in thousands)
Mortgage-backed securities	$	11,106	$	74	$	569	$	10,611
Trust preferred securities	6,120		—		1,884		4,236
U.S. government agency notes	61,549		29		784		60,794
U.S. Treasury securities	4,768		2		—		4,770
Equity securities - banks	1,175		—		298		877
Equity securities - mutual funds	750		6		—		756
	$	85,468	$	111	$	3,535	$	82,044

	December 31, 2012
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(dollars in thousands)
Mortgage-backed securities	$	7,040	$	169	$	75	$	7,134
Trust preferred securities	11,246		79		2,144		9,181
U.S. government agency notes	33,435		107		5		33,537
U.S. Treasury securities	5,779		2		—		5,781
Equity securities - banks	1,288		16		48		1,256
Equity securities - mutual funds	750		37		—		787
	$	59,538	$	410	$	2,272	$	57,676

Contractual maturities of debt securities at June 30, 2013 are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Estimated
	Cost		Fair Value
	(dollars in thousands)
Due in one year or less	$	27,520	$	27,143
Due after one year through five years	38,797		38,421
Due after ten years	6,120		4,236
Mortgage-backed securities	11,106		10,611
	$	83,543	$	80,411

The following tables show the level of our gross unrealized losses and the fair value of the associated securities by type and maturity for AFS securities:

	June 30, 2013
	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(dollars in thousands)
Mortgage-backed securities	$	9,208	$	569	$	—	$	—	$	9,208	$	569
Trust preferred securities	—		—		4,236		1,884		4,236		1,884
U.S. government agency notes	41,535		784		—		—		41,535		784
Equity securities - banks	877		298		—		—		877		298
	$	51,620	$	1,651	$	4,236	$	1,884	$	55,856	$	3,535

	December 31, 2012
	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(dollars in thousands)
Mortgage-backed securities	$	3,552	$	75	$	—	$	—	$	3,552	$	75
Trust preferred securities	—		—		5,027		2,144		5,027		2,144
U.S. government agency notes	9,139		5		—		—		9,139		5
Equity securities - banks	1,035		47		123		1		1,158		48
	$	13,726	$	127	$	5,150	$	2,145	$	18,876	$	2,272

The trust preferred securities that we hold in our securities portfolio are issued by other banks, bank holding companies, and insurance companies. Certain of these securities have experienced declines in value since acquisition. These declines have occurred due to changes in the market which has limited the demand for these securities and reduced their liquidity. We consider the decline in value for four pooled trust preferred securities to be other than temporary and recorded the credit-related portion of the impairment as net OTTI of $460,000 during the six months ended June 30, 2012. No additional OTTI charges were required during 2013. See additional information on the pooled trust preferred securities in Note 9.

The following shows the activity in OTTI related to credit losses for the six months ended June 30:

	2013		2012
	(dollars in thousands)
Balance at beginning of period	$	9,190	$	8,730
Additional OTTI taken for credit losses	—		460
Balance at end of period	$	9,190	$	9,190

All of the remaining securities that are impaired are so due to declines in fair values resulting from changes in interest rates or increased credit/liquidity spreads since the time they were purchased. We have the intent to hold these debt securities to maturity, and, for debt and equity securities in a loss position, for the foreseeable future and do not intend, nor do we believe it is more likely than not, that we will be required to sell the securities before anticipated recovery. We expect these securities will be repaid in full, with no losses realized. As such, management considers the impairments to be temporary.

At June 30, 2013, we held securities with an aggregate carrying value (fair value) of $45.4 million that we have pledged as collateral for certain mortgage-banking and hedging activities, borrowings, government deposits, and customer deposits.