Investment securities totaled $2.45 billion at December 31, 2012 and $2.26 billion at September 30, 2012, and were up from $2.20 billion at December 31, 2011. As of December 31, 2012, we had a pretax unrealized gain of $74.6 million of which $41.7 million is attributed to our municipal securities portfolio and $32.9 million is attributed to the remainder of the portfolio which is predominantly our mortgage-backed securities (“MBS”) portfolio.
MBS totaled $1.46 billion at December 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 $2.1 million as of December 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 for the fourth quarter of 2012.
Our municipal securities, totaling $625.4 million, are located in 27 states, with approximately $25.8 million, or 4.1%, located within the state of California. Our largest holdings are in New Jersey at 14.3%, Michigan at 12.4% and Illinois at 10.5%. All municipal bond securities are performing.During the fourth quarter of 2012, we purchased $110.4 million in MBS with an average yield of 1.61%. MBS purchased during the fourth quarter have a weighted average duration of about 3.98 years. There were zero purchases of municipal securities during the fourth quarter of 2012. Loans Total loans and leases, net of deferred fees and discount, of $3.45 billion at December 31, 2012, increased by $11.8 million, or 0.34%, from $3.44 billion at September 30, 2012. Quarter-over-quarter, non-covered loans grew by $23.9 million, while covered loans declined by $12.1 million. Total loans and leases, net of deferred fees and discount, of $3.45 billion at December 31, 2012, decreased by $35.1 million, or 1.01%, from $3.48 billion at December 31, 2011. Non-covered loans grew by $32.2 million year-over-year, while covered loans declined by $67.3 million.