Note 5 — Investment Securities

The amortized cost and estimated fair value of securities were as follows:

	June 30, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	84,576	$	1,211	$	(354	)	$	85,433
Mortgage-backed securities	150,578		230		(1,125		)	149,683
Total securities available for sale	$	235,154	$	1,441	$	(1,479	)	$	235,116

	December 31, 2013
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	73	$	8	$	—		$	81
Municipal bonds	95,388		589		(1,850		)	94,127
Mortgage-backed securities	165,857		12		(3,988		)	161,881
Total securities available for sale	$	261,318	$	609	$	(5,838	)	$	256,089

	June 30, 2013
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	73	$	10	$	—		$	83
Corporate	9,169		—		—			9,169
Municipal bonds	96,257		226		(1,736		)	94,747
Mortgage-backed securities	210,367		736		(2,055		)	209,048
Total securities available for sale	$	315,866	$	972	$	(3,791	)	$	313,047

At June 30, 2014, the Company had $10.0 million in Federal Home Loan Bank (“FHLB”) stock, $3.9 million in Federal Reserve Bank (“FRB”) stock, and $4.5 million in other stock, all carried at cost. During the six months ended June 30, 2014, the FHLB has repurchased $1.4 million of the Company’s excess FHLB stock through its stock repurchase program.

At June 30, 2014, mortgage-backed securities (“MBS”) with an estimated par value of $67.0 million and a fair value of $69.5 million were pledged as collateral for the Bank’s three reverse repurchase agreements which totaled $28.5 million and HOA reverse repurchase agreements which totaled $16.8 million.

The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position.

	June 30, 2014
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)

Municipal bonds	27	$	14,011	$	(143	)	44	$	18,316	$	(211	)	71	$	32,327	$	(354	)
Mortgage-backed securities	11	37,316		(109		)	12	52,235		(1,016		)	23	89,551		(1,125		)
Total	38	$	51,327	$	(252	)	56	$	70,551	$	(1,227	)	94	$	121,878	$	(1,479	)

	December 31, 2013
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)

Municipal bonds	133	$	61,524	$	(1,850	)	—	$	—	$	—		133	$	61,524	$	(1,850	)
Mortgage-backed securities	45	140,704		(3,075		)	1	12,607		(913		)	46	153,311		(3,988		)
Total	178	$	202,228	$	(4,925	)	1	$	12,607	$	(913	)	179	$	214,835	$	(5,838	)

	June 30, 2013
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)

Municipal bonds	122	$	51,937	$	(1,736	)	—	$	—	$	—		122	$	51,937	$	(1,736	)
Mortgage-backed securities	29	86,940		(1,916		)	17	713		(138		)	46	87,653		(2,054		)
Total	151	$	138,877	$	(3,652	)	17	$	713	$	(138	)	168	$	139,590	$	(3,790	)

The amortized cost and estimated fair value of investment securities available for sale at June 30, 2014, by contractual maturity are shown in the table below.

	One Year				More than One				More than Five Years				More than
	or Less				Year to Five Years				to Ten Years				Ten Years				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value
	(dollars in thousands)
Investment securities available for sale:
Municipal bonds	$	—	$	—	$	12,575	$	12,594	$	36,947	$	37,191	$	35,054	$	35,648	$	84,576	$	85,433
Mortgage-backed securities	—		—		—		—		23,827		23,756		126,751		125,927		150,578		149,683
Total investment securities available for sale	—		—		12,575		12,594		60,774		60,947		161,805		161,575		235,154		235,116

Any temporary impairment is a result of the change in market interest rates and not the underlying issuers’ ability to repay. The Company has the intent and ability to hold these securities until the temporary impairment is eliminated. Accordingly, the Company has not recognized the temporary impairment in earnings.

Unrealized gains and losses on investment securities available for sale are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At June 30, 2014, the Company had accumulated other comprehensive loss of $38,000, or $22,000 net of tax, compared to accumulated other comprehensive loss of $5.2 million, or $3.1 million net of tax, at December 31, 2013.