| Securities |
Note 3. Securities
The primary strategic objective related to the Company’s securities portfolio is to assist with liquidity and interest rate risk management. The fair value of securities classified as available-for-sale was $181.5 million at September 30, 2012 compared to $228.8 million at December 31, 2011. The carrying value of securities classified as restricted (Federal Reserve and Federal Home Loan Bank stock) was $7.0 million at September 30, 2012 compared to $9.2 million at December 31, 2011. The Company does not have any securities classified as trading or held-to-maturity.
The following tables represent the fair value of available-for-sale securities and the related, gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at September 30, 2012 and December 31, 2011:
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September 30, 2012
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Gross
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Gross
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Fair
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Unrealized
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Unrealized
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Amortized
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Value
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Gains
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Losses
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Cost
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U.S. government agencies
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$
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7,069
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$
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73
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$
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-
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$
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6,996
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States and political subdivisions
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16,243
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764
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-
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15,479
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U.S. government agency residential
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mortgage-backed securities
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119,130
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3,145
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-
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115,985
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Collateralized residential mortgage obligations:
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Agency
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23,336
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234
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-
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23,102
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Private label
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1,083
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69
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-
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1,014
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Equity securities
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2,683
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242
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-
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2,441
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Collateralized debt obligations:
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Single issue
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2,064
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-
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-
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2,064
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Pooled
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7,888
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1,172
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(1,165)
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7,881
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Corporate
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2,000
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-
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-
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2,000
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$
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181,496
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$
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5,699
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$
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(1,165)
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$
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176,962
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Note 3. Securities (Continued)
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December 31, 2011
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Gross
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Gross
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Fair
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Unrealized
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Unrealized
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Amortized
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Value
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Gains
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Losses
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Cost
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U.S. government agencies
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$
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3,019
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$
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88
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$
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-
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$
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2,931
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States and political subdivisions
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18,125
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649
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(1)
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17,477
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U.S. government agency residential
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177,539
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2,790
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(101)
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174,850
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mortgage-backed securities
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Collateralized residential mortgage obligations:
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15,527
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229
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-
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15,298
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Agency
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1,550
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72
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(7)
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1,485
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Private label
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2,530
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134
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-
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2,396
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Equity securities
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Collateralized debt obligations:
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Single issue
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2,064
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-
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-
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2,064
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Pooled
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6,600
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53
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(1,574)
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8,121
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Corporate
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1,882
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-
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(118)
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2,000
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$
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228,836
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$
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4,015
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$
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(1,801)
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$
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226,622
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The amounts below include the activity for available-for-sale securities related to sales, maturities and calls:
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2012
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2011
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2012
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2011
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Proceeds from calls and maturities
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$
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8,000
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$
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6,080
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$
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10,310
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$
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18,000
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Proceeds from sales
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30,312
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-
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48,381
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18,419
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Realized gains
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686
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-
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1,400
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379
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Realized losses
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(2)
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-
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(2)
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-
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Net impairment loss recognized in earnings
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-
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-
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-
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(499)
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Tax benefit (provision) related
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to net realized gains and losses
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(265)
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-
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(542)
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46
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The following table represents securities with unrealized losses not recognized in income presented by the length of time individual securities have been in a continuous unrealized loss position:
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September 30, 2012
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Less than 12 Months
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12 Months or More
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Total
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Fair
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Unrealized
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Fair
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Unrealized
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Fair
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Unrealized
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Value
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Loss
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Value
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Loss
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Value
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Loss
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Collateralized debt obligations: pooled
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$
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-
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$
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-
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$
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2,206
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$
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(1,165)
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$
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2,206
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$
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(1,165)
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Total temporarily impaired
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$
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-
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$
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-
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$
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2,206
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$
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(1,165)
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$
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2,206
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$
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(1,165)
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Note 3. Securities (Continued)
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December 31, 2011
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Less than 12 Months
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12 Months or More
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Total
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Fair
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Unrealized
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Fair
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Unrealized
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Fair
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Unrealized
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Value
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Loss
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Value
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Loss
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Value
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Loss
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State and political subdivisions
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$
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524
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$
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(1)
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$
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-
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$
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-
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$
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524
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$
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(1)
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U.S. government agency residential
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mortgage-backed securities
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30,895
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(101)
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-
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-
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30,895
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(101)
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Collateralized residential mortgage
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obligations: private label
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731
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(7)
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-
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-
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731
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(7)
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Collateralized debt obligations: pooled
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-
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-
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6,497
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(1,574)
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6,497
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(1,574)
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Corporate
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1,882
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(118)
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-
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-
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1,882
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(118)
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Total temporarily impaired
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$
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34,032
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$
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(227)
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$
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6,497
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$
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(1,574)
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$
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40,529
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$
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(1,801)
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The fair values of securities classified as available-for-sale at September 30, 2012, by contractual maturity, are shown as follows. Securities not due at a single maturity date, including mortgage-backed securities, collateralized mortgage obligations, and equity securities are shown separately.
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Amortized
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Fair
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Cost
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Value
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Due in one year or less
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$
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2,156
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$
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2,167
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Due after one year through five years
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16,204
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16,653
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Due after five years through ten years
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5,488
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5,847
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Due after ten years
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10,572
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10,597
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U.S. government agency residential mortgage-backed securities
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115,985
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119,130
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Collateralized residential mortgage obligations
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24,116
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24,419
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Equity
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2,441
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2,683
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$
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176,962
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$
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181,496
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The following table presents a rollforward of the credit losses recognized in earnings for the three month period ended September 30, 2012 and 2011:
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2012
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2011
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Beginning balance, July 1,
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$
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20,597
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$
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20,861
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Amounts related to credit loss for which
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an other-than-temporary impairment was not previously recognized
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-
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-
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Additions/Subtractions
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Amounts realized for securities sold during the period
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-
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-
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Amounts related to securities for which the company
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intends to sell or that it will be more likely than not that the company
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will be required to sell prior to recovery of amortized cost basis
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-
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-
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Reductions for increase in cash flows expected to be
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collected that are recognized over the remaining life of the security
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-
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-
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Increases to the amount related to the credit
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loss for which other-than-temporary was previously recognized
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-
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-
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Ending balance, September 30,
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$
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20,597
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$
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20,861
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Note 3. Securities (Continued)
The following table presents a rollforward of the credit losses recognized in earnings for the nine month period ended September 30, 2012 and 2011:
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2012
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2011
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Beginning balance, January 1,
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$
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20,597
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$
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20,362
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Amounts related to credit loss for which
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an other-than-temporary impairment was not previously recognized
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-
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-
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Additions/Subtractions
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Amounts realized for securities sold during the period
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-
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-
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Amounts related to securities for which the company
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intends to sell or that it will be more likely than not that the company
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will be required to sell prior to recovery of amortized cost basis
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-
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-
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Reductions for increase in cash flows expected to be
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collected that are recognized over the remaining life of the security
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-
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-
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Increases to the amount related to the credit
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loss for which other-than-temporary was previously recognized
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-
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499
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Ending balance, September 30,
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$
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20,597
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$
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20,861
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See Note 9 on Fair Value for additional information about our analysis on the security portfolio related to the fair value and other-than-temporary impairment disclosures of these instruments.
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