Investment securities totaled $2.38 billion at March 31, 2012. This is up from $2.20 billion at December 31, 2011. Our investment portfolio continues to perform well. As of March 31, 2012 we had a pretax unrealized gain of $71.4 million of which $41.6 million is attributed to our municipal securities portfolio and $29.6 million is attributed to our mortgage-backed securities (“MBS”) portfolio.
MBS totaled $1.68 billion at March 31, 2012. Virtually all of our mortgage-backed securities are issued by Freddie Mac or Fannie Mae, which have the implied guarantee of the U.S. Government. We have one private-label mortgage-backed security that has impairment. This Alt-A bond, with a book value of $2.3 million as of March 31, 2012, has had $1.8 million in net impairment loss to date since it was purchased in early 2008, with no additional impairment recorded in the first quarter of 2012.
Our municipal securities, totaling $646.7 million, are located in 28 states, with approximately $15.6 million, or 6.0%, located within the state of California. Our largest holdings are in New Jersey at 14.3%, Michigan at 12.1% and Illinois at 11.5%. All municipal bond securities are performing.In the fourth quarter of 2011, we purchased and now hold $10.5 million in trust preferred securities at March 31, 2012. We continue to reinvest our cash flows from the investment portfolio. During the first quarter of 2012, we purchased $318.2 million in MBS with an average yield of 1.82% and $13.1 million in municipal securities with an average tax-equivalent yield of 3.58%. MBS purchased during the first quarter have an average duration of about 4 years. One of the objectives of our purchasing strategy is to minimize extension risk as interest rates rise. Loans Total loans and leases, net of deferred fees and discount, of $3.43 billion at March 31, 2012, decreased by $50.2 million, or 1.44%, from $3.48 billion at December 31, 2011. We attribute this decrease to the following:
- $57.7 million to the non-covered dairy and livestock portfolio. Historically, our dairy and livestock customers have seasonal borrowing patterns and tend to draw down on available lines of credit in the fourth quarter and repay these advances in the first quarter.
- $8.8 million decline in non-covered construction loans.
- $8.3 million decline in purchased mortgage pools.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV