Note 5 — Investment Securities

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

	September 30, 2014
Investment securities available for sale:	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Municipal bonds	$	97,358	$	1,495	$	(268	)	$	98,585
Mortgage-backed securities	184,701		180		(1,264		)	183,617
Total securities available for sale	$	282,059	$	1,675	$	(1,532	)	$	282,202

	December 31, 2013
Investment securities available for sale:	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
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

	September 30, 2013
Investment securities available for sale:	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
U.S. Treasury	$	73	$	9	$	—		$	82
Municipal bonds	95,971		709		(1,795		)	94,885
Mortgage-backed securities	191,282		182		(3,585		)	187,879
Total securities available for sale	$	287,326	$	900	$	(5,380	)	$	282,846

At September 30, 2014, the Company had $9.2 million in Federal Home Loan Bank (“FHLB”) stock, $5.4 million in Federal Reserve Bank (“FRB”) stock, and $4.1 million in other stock, all carried at cost. During the nine months ended September 30, 2014, the FHLB has repurchased $2.2 million of the Company’s excess FHLB stock through its stock repurchase program.

At September 30, 2014, mortgage-backed securities (“MBS”) with an estimated par value of $63.4 million and a fair value of $65.5 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 $16.1 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.

	September 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	29	$	16,804	$	(183	)	26	$	10,459	$	(85	)	55	$	27,263	$	(268	)
Mortgage-backed securities	22	85,248		(256		)	9	42,516		(1,008		)	31	127,764		(1,264		)
Total	51	$	102,052	$	(439	)	35	$	52,975	$	(1,093	)	86	$	155,027	$	(1,532	)

	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	)

	September 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	131	$	60,183	$	(1,795	)	—	$	—	$	—		131	$	60,183	$	(1,795	)
Mortgage-backed securities	39	136,513		(2,725		)	1	13,117		(860		)	40	149,630		(3,585		)
Total	170	$	196,696	$	(4,520	)	1	$	13,117	$	(860	)	171	$	209,813	$	(5,380	)

The amortized cost and estimated fair value of investment securities available for sale at September 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
Investment securities available for sale:	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value
	(dollars in thousands)
Municipal bonds	$	—	$	—	$	12,828	$	12,877	$	41,817	$	42,379	$	42,713	$	43,329	$	97,358	$	98,585
Mortgage-backed securities	—		—		—		—		30,477		30,394		154,224		153,223		184,701		183,617
Total investment securities available for sale	—		—		12,828		12,877		72,294		72,773		196,937		196,552		282,059		282,202

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 September 30, 2014, the Company had accumulated other comprehensive income of $143,000, or $84,000 net of tax, compared to accumulated other comprehensive loss of $5.2

million, or $3.1 million net of tax, at December 31, 2013.