The Company reported total assets of $6.52 billion at June 30, 2012. This represents an increase of $41.0 million, or 0.63%, from total assets of $6.48 billion at December 31, 2011. Earning assets totaled $6.15 billion at June 30, 2012, an increase of $17.8 million, or 0.29%, when compared with earning assets of $6.13 billion at December 31, 2011. The increase in earning assets was due to an increase in the investment portfolio and interest-earning cash, partially offset by a decrease in the loan portfolio.
Investment securities totaled $2.26 billion at June 30, 2012. This is up from $2.20 billion at December 31, 2011. Our investment portfolio continues to perform well. As of June 30, 2012 we had a pretax unrealized gain of $75.1 million of which $42.3 million is attributed to our municipal securities portfolio and $32.6 million is attributed to our mortgage-backed securities (“MBS”) portfolio.MBS totaled $1.58 billion at June 30, 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 $2.2 million as of June 30, 2012, has had $1.8 million in net impairment loss to date since it was purchased in early 2008, with no additional impairment recorded for the second quarter of 2012. Our municipal securities, totaling $634.9 million, are located in 27 states, with approximately $26.6 million, or 4.2%, located within the state of California. Our largest holdings are in New Jersey at 14.5%, Michigan at 12.3% and Illinois at 11.7%. All municipal bond securities are performing. We continued to reinvest our cash flows from the investment portfolio. During the second quarter of 2012, we purchased $30.9 million in MBS with an average yield of 1.60% and $6.5 million in municipal securities with an average tax-equivalent yield of 3.17%. MBS purchased during the second quarter have an average duration of about 4.9 years. One of the primary objectives of our purchasing strategy is to minimize extension risk as interest rates rise.
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