predict loan losses with certainty nor can we assure you that our allowance for loan losses will prove sufficient to cover  actual loan losses in the future. Loan losses in excess of our reserves will adversely affect our business, financial condition  and results of operations. The increased levels of provision for loan losses experienced during recent years, as compared to  historical levels, may continue for some period of time.  We may be required to record impairment charges on our investment securities if they suffer further declines in  value that are considered other-than-temporary. If the credit quality of the securities in our investment portfolio further  deteriorates, we may also experience a loss in interest income from the suspension of either interest or dividend payments. Numerous factors, including lack of liquidity for resales of certain investment securities, absence of reliable pricing  information for investment securities, adverse changes in business climate or adverse actions by regulators could have a  negative effect on our investment portfolio in future periods. We invest in tax-exempt state and local municipal investment securities, some of which are insured by monoline  insurers. As of December 31, 2012, we had $115.4 million of municipal securities, which represented 54.1% of our total  securities portfolio. Since the economic crisis unfolded in 2008, several of these insurers have come under scrutiny by  rating agencies. Even though management generally purchases municipal securities on the overall credit strength of the  issuer, the reduction in the credit rating of an insurer may negatively impact the market for and valuation of our investment  securities. Such downgrade could adversely affect our liquidity, financial condition and results of operations.  One-to-four family residential mortgage loans comprised $88.5 million and $79.1 million, or 27.6% and 25.2%, of  our loan portfolio at December 31, 2012 and 2011, respectively. These loans are secured primarily by properties located in  the state of Kansas. Our concentration of these loans results in lower yields relative to other loan categories within our loan  portfolio. While these loans generally possess higher yields than investment securities, their repayment characteristics are  not as well defined and they generally possess a higher degree of interest rate risk versus other loans and investment  securities within our portfolio. This increased interest rate risk is due to the repayment and prepayment options inherent in  residential mortgage loans which are exercised by borrowers based upon the overall level of interest rates. These residential  mortgage loans are generally made on the basis of the borrower’s ability to make repayments from his or her employment  and the value of the property securing the loan. Thus, as a result, repayment of these loans is also subject to general  economic and employment conditions within the communities and surrounding areas where the property is located.  The effects of the mortgage market challenges of recent years, combined with depressed residential real estate  market prices and historically lower levels of home sales, has the potential to adversely affect our one-to-four family  residential mortgage portfolio in several ways, each of which could adversely affect our operating results and/or financial  condition. When the Bank sells mortgage loans, we are required to make certain representations and warranties to the  purchaser about the loans and the manner in which they were originated. Our sales agreements require us to repurchase  mortgage loans in the event we breach any of these representations or warranties. In addition, we may be required to  repurchase mortgage loans as a result of borrower fraud or in the event of early payment default of the borrower on a  mortgage loan. If repurchase and indemnity demands increase, our liquidity, results of operations and financial condition  will be adversely affected.  The Bank may be required to repurchase mortgage loans in some circumstances, which could harm our liquidity, results of operations and financial condition. Our concentration of one-to-four family residential mortgage loans may result in lower yields and profitability.  Downgrades in the credit rating of one or more insurers that provide credit enhancement for our state and  municipal securities portfolio may have an adverse impact on the market for and valuation of these types of  securities.  Declines in value may adversely impact the carrying amount of our investment portfolio and result in other-than- temporary impairment charges. 37 