Investment Securities

12 Months Ended

Dec. 31, 2014

Investment Securities [Abstract]

Investment Securities

NOTE 2 – Investment Securities

The amortized costs and fair value of investment securities are as follows:

	December 31, 2014
	Amortized		Gross Unrealized		Fair
(dollars in thousands)	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	8,763	9	215	8,557
SBA securities		5,336	-	182	5,154
State and political subdivisions		16,253	598	51	16,800
Mortgage-backed securities
FHLMC		7,284	60	12	7,332
FNMA		16,846	273	30	17,089
GNMA		84	8	-	92
Total mortgage-backed securities		24,214	341	42	24,513
Total	$	54,566	948	490	55,024
	December 31, 2013
	Amortized		Gross Unrealized		Fair
	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	8,756	-	1,001	7,755
SBA securities		5,758	-	487	5,271
State and political subdivisions		23,622	331	583	23,370
Mortgage-backed securities
FHLMC		7,596	62	186	7,472
FNMA		23,603	172	363	23,412
GNMA		148	12	-	160
Total mortgage-backed securities		31,347	246	549	31,044
Total	$	69,483	577	2,620	67,440

During the second quarter of 2014, we developed a need for additional liquidity as we experienced increased loan demand and, as a result, sold $10.4 million of our mortgage-backed securities and state and municipal obligations and recorded a net gain on sale of investment securities of $230,000. There were no sales of investment securities during 2013.

The amortized costs and fair values of investment securities available for sale at December 31, 2014 and 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to prepay the obligations.

	December 31,
	2014			2013
	Amortized		Fair	Amortized	Fair
(dollars in thousands)	Cost		Value	Cost	Value
Available for sale
Due within one year	$	2,081	2,082	1,507	1,507
Due after one through five years		1,356	1,387	2,121	2,114
Due after five through ten years		10,143	10,583	10,268	10,426
Due after ten years		40,986	40,972	55,587	53,393
	$	54,566	55,024	69,483	67,440

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2014 and 2013.

	Less than 12 months					12 months or longer					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	#	value		losses		#	value		losses		#	value		losses
As of December 31, 2014
Available for sale
US government agencies	-	$	-	$	-	2	$	7,569	$	215	2	$	7,569	$	215
SBA securities	-		-		-	2		5,154		182	2		5,154		182
State and political subdivisions	-		-		-	7		3,488		51	7		3,488		51
Mortgage-backed
FHLMC	1		731		1	1		2,472		11	2		3,203		12
FNMA	2		3,676		10	1		2,284		20	3		5,960		30
	3	$	4,407	$	11	13	$	20,967	$	479	16	$	25,374	$	490
As of December 31, 2013
Available for sale
US government agencies	3	$	7,755	$	1,001	-	$	-	$	-	3	$	7,755	$	1,001
SBA securities	-		-		-	2		5,271		487	2		5,271		487
State and political subdivisions	22		8,482		364	9		3,705		219	31		12,187		583
Mortgage-backed
FHLMC	3		5,006		186	-		-		-	3		5,006		186
FNMA	7		11,140		363	-		-		-	7		11,140		363
	35	$	32,383	$	1,914	11	$	8,976	$	706	46	$	41,359	$	2,620

At December 31, 2014, the Company had three individual investments with a fair market value of $4.4 million that were in an unrealized loss position for less than 12 months and 13 individual investments with a fair market value of $21.0 million that were in an unrealized loss position for 12 months or longer. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers the length of time and extent to which the fair value of available-for-sale debt securities have been less than cost to conclude that such securities were not other-than-temporarily impaired. We also consider other factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. As the Company has no intent to sell securities with unrealized losses and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of amortized cost, we have concluded that the securities are not impaired on an other-than-temporary basis.

Other investments are comprised of the following and are recorded at cost which approximates fair value:

	December 31,
(dollars in thousands)	2014		2013
Federal Home Loan Bank stock	$	6,020	5,614
Certificates of deposit		99	99
Investment in Trust Preferred subsidiaries		403	403
	$	6,522	6,116

The Company has evaluated the FHLB stock for impairment and determined that the investment in FHLB stock is not other than temporarily impaired as of December 31, 2014 and ultimate recoverability of the par value of this investment is probable. All of the FHLB stock is used to collateralize advances with the FHLB.

At December 31, 2014, $21.8 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $12.9 million was pledged to secure client deposits. At December 31, 2013, $22.0 million of securities were pledged as collateral for repurchase agreements from brokers. In addition, approximately $25.0 million was pledged to secure client deposits.