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Investment Securities
 3 Months Ended
Mar. 31, 2015
Investment Securities [Abstract]  
Investment Securities

NOTE 3 – Investment Securities

 

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

 

 
  March 31, 2015
  Amortized Gross Unrealized Fair
(dollars in thousands) Cost Gains Losses Value
Available for sale        
US government agencies $   8,764  22  85  8,701 
SBA securities 5,335  -  128  5,207 
State and political subdivisions 13,867  449  32  14,284 
Mortgage-backed securities 20,004  346  16  20,334 
     Total investment securities available for sale $ 47,970  817  261  48,526 
    
  December 31, 2014
  Amortized Gross Unrealized Fair
  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 24,214 341 42 24,513
     Total investment securities available for sale $ 54,566 948 490 55,024

 

During the first quarter of 2015, we developed a need for additional liquidity as we experienced increased loan demand and, as a result, sold $5.8 million of our mortgage-backed securities and state and municipal obligations and recorded a net gain on sale of investment securities of $259,000.

 

Contractual maturities and yields on our investment securities at March 31, 2015 and December 31, 2014 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 
                     March 31, 2015  
     Less than one year  One to five years  Five to ten years  Over ten years  Total  
(dollars in thousands)          Amount    Yield    Amount    Yield    Amount    Yield    Amount    Yield    Amount    Yield
Available for sale
US government agencies
               $ —              —              1,001               2.12%              —              —              7,700              2.43%              8,701               2.39 %  
SBA securities
                  —              —              —             —             —             —             5,207             1.86%             5,207             1.86 %  
State and political subdivisions
                  2,072             0.68%             —             —             7,068             3.13%             5,144             2.93%             14,284             2.69 %  
Mortgage-backed securities
                  —              —              —              —              1,249              1.75%              19,085              2.59%              20,334              2.54 %  
Total
               $ 2,072             0.68%             1,001             2.12%             8,317             2.92%             37,136             2.50%             48,526             2.48 %  

 

 

 

 
                     December 31, 2014  
     Less than one year  One to five years  Five to ten years  Over ten years  Total  
        Amount  Yield  Amount  Yield  Amount  Yield  Amount  Yield  Amount  Yield
Available for sale
US government agencies
               $ —              —              988              2.12 %            —              —              7,569             2.43 %            8,557             2.39 %  
SBA securities
                  —              —              —              —              —              —              5,154             1.88 %            5,154             1.88 %  
State and political subdivisions
                  2,082             0.68 %            399              3.14 %            8,465             3.23 %            5,854             3.00 %            16,800             2.82 %  
Mortgage-backed securities
                  —              —              —              —              2,118             1.66 %            22,395             2.62 %            24,513             2.54 %  
Total
               $ 2,082             0.68 %            1,387             2.41 %            10,583             2.91 %            40,972             2.54 %            55,024             2.54 %  

 

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at March 31, 2015 and December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

 

         
      March 31, 2015
    Less than 12 months   12 months or longer   Total
(dollars in thousands) # Fair
value		 Unrealized
losses		 # Fair
value		 Unrealized
losses		 # Fair
value		 Unrealized
losses
Available for sale                    
US government agencies 2 $  7,699 $  85 - $         -  $       - 2 $   7,699 $     85
SBA securities - - - 2 5,207 128 2 5,207 128
State and political subdivisions 2 742 5 4 2,264 27 6 3,006 32
Mortgage-backed securities 2 4,628 16 - - - 2 4,628 16
Total 6 $13,069 $106 6 $ 7,471 $  155 12 $20,540 $261
                     
      December 31, 2014
  Less than 12 months 12 months or longer Total
  # Fair
value		 Unrealized
losses		 # Fair
value		 Unrealized
losses		 # Fair
value		 Unrealized
losses
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 securities 3  4,407  11  2  4,756  3  5  9,163  42 
Total 3  $ 4,407  $   11  13  $ 20,967  $    479  16  $ 25,374  $  490 
                   

At March 31, 2015, the Company had six individual investments with a fair market value of $13.1 million that were in an unrealized loss position for less than 12 months and six individual investments with a fair market value of $7.5 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 are 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 these 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.

 

     
(dollars in thousands) March 31, 2015 December 31, 2014
Federal Home Loan Bank stock $  5,005   6,020
Investment in Trust Preferred securities 403 403
Other investments 99 99
Total other investments $  5,507   6,522

 

The Company has evaluated the Federal Home Loan Bank (“FHLB”) stock for impairment and determined that the investment in the FHLB stock is not other than temporarily impaired as of March 31, 2015 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 March 31, 2015 $20.4 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $12.0 million of securities were pledged to secure client deposits. At December 31, 2014, $21.8 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $12.9 million of securities were pledged to secure client deposits.