Investment Securities

3 Months Ended

Mar. 31, 2015

Investment Securities

Investment Securities

Note 5 — Investment Securities

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

	March 31, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	103,997	$	1,718	$	(192	)	$	105,523
Mortgage-backed securities	174,281		1,097		(440		)	174,938
Total securities available for sale	$	278,278	$	2,815	$	(632	)	$	280,461
	December 31, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	88,599	$	1,235	$	(173	)	$	89,661
Mortgage-backed securities	112,159		432		(614		)	111,977
Total securities available for sale	$	200,758	$	1,667	$	(787	)	$	201,638
	March 31, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	77,062	$	848	$	(586	)	77,324
Mortgage-backed securities	126,921		65		(2,168		)	124,818
Total securities available for sale	$	203,983	$	913	$	(2,754	)	$	202,142

At March 31, 2015, the Company had $21.9 million in Federal Home Loan Bank (“FHLB”) stock, $5.4 million in Federal Reserve Bank (“FRB”) stock, and $3.3 million in other stock, all carried at cost.  During the three months ended March 31, 2015, the Company had net purchases of $13.5 million of FHLB stock through the FHLB stock purchase program.

At March 31, 2015, mortgage-backed securities (“MBS”) with an estimated par value of $59.6 million and a fair value of $61.7 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 $14.9 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.

	March 31, 2015
	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	48	$	20,818	$	(179	)	3	$	1,073	$	(13	)	51	$	21,891	$	(192	)
Mortgage-backed securities	10	21,857		(66		)	3	15,111		(374		)	13	36,968		(440		)
Total	58	$	42,675	$	(245	)	6	$	16,184	$	(387	)	64	$	58,859	$	(632	)

	December 31, 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	35	$	18,129	$	(117	)	16	$	6,510	$	(56	)	51	$	24,639	$	(173	)
Mortgage-backed securities	7	24,353		(105		)	4	18,842		(509		)	11	43,195		(614		)
Total	42	$	42,482	$	(222	)	20	$	25,352	$	(565	)	62	$	67,834	$	(787	)

	March 31, 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	74	$	36,765	$	(476	)	12	$	5,046	$	(110	)	86	$	41,811	$	(586	)
Mortgage-backed securities	32	93,299		(1,422		)	1	12,312		(746		)	33	105,611		(2,168		)
Total	106	$	130,064	$	(1,898	)	13	$	17,358	$	(856	)	119	$	147,422	$	(2,754	)

The amortized cost and estimated fair value of investment securities available for sale at March 31, 2015, 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	$	466	$	470	$	21,044	$	21,076	$	35,914	$	36,539	$	46,573	$	47,438	$	103,997	$	105,523
Mortgage-backed securities	—		—		251		255		27,988		28,208		146,042		146,475		174,281		174,938
Total investment securities available for sale	466		470		21,295		21,331		63,902		64,747		192,615		193,913		278,278		280,461

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 March 31, 2015, the Company had accumulated other comprehensive income of $2.2 million, or $1.3 million net of tax, compared to accumulated other comprehensive loss of $880,000 or $518,000 net of tax, at December 31, 2014.