Investment Securities

3 Months Ended

Mar. 31, 2016

Investment Securities [Abstract]

Investment Securities

NOTE 2 – Investment Securities

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

	March 31, 2016
	Amortized		Gross Unrealized		Fair
(dollars in thousands)	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	11,535	129	-	11,664
SBA securities		6,359	-	33	6,326
State and political subdivisions		19,794	561	5	20,350
Mortgage-backed securities		38,599	214	88	38,725
Total investment securities available for sale	$	76,287	904	126	77,065
	December 31, 2015
	Amortized		Gross Unrealized		Fair
	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	14,711	1	113	14,599
SBA securities		6,410	-	133	6,277
State and political subdivisions		21,771	525	37	22,259
Mortgage-backed securities		47,053	191	440	46,804
Total investment securities available for sale	$	89,945	717	723	89,939

During the first quarter of 2016, approximately $12.2 million of investment securities were either sold or called, subsequently resulting in a gain on sale of $307,000.

Contractual maturities and yields on the Company’s investment securities at March 31, 2016 and December 31, 2015 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, 2016
	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	$	-	-	1,015	1.75%	8,898	2.49%	1,751	3.07%	11,664	2.39%
SBA securities		-	-	-	-	-	-	6,326	1.74%	6,326	1.74%
State and political subdivisions		-	-	469	1.63%	13,286	2.44%	6,595	2.97%	20,350	2.59%
Mortgage-backed securities		-	-	-	-	5,801	1.57%	32,924	1.97%	38,725	1.91%
Total	$	-	-	1,484	1.71%	27,985	2.28%	47,596	2.11%	77,065	2.16%
	December 31, 2015
	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	$	-	-	4,149	1.74%	8,704	2.49%	1,746	3.03%	14,599	2.34%
SBA securities		-	-	-	-	-	-	6,277	1.79%	6,277	1.79%
State and political subdivisions		-	-	464	1.63%	14,032	2.64%	7,763	2.84%	22,259	2.69%
Mortgage-backed securities		-	-	-	-	8,048	1.56%	38,756	2.08%	46,804	1.99%
Total	$	-	-	4,613	1.73%	30,784	2.31%	54,542	2.18%	89,939	2.20%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at March 31, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	March 31, 2016
	Less than 12 months					12 months or longer					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	#	value		losses		#	value		losses		#	value		losses
Available for sale
US government agencies	-	$	-	$	-	-	$	-	$	-	-	$	-	$	-
SBA securities	1		1,531		5	2		4,795		28	3		6,326		33
State and political subdivisions	1		612		1	2		974		4	3		1,586		5
Mortgage-backed securities	2		4,764		75	2		2,393		13	4		7,157		88
Total	4	$	6,907	$	81	6	$	8,162	$	45	10	$	15,069	$	126
	December 31, 2015
	Less than 12 months					12 months or longer					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	#	value		losses		#	value		losses		#	value		losses
Available for sale
US government agencies	9	$	12,853	$	113	-	$	-	$	-	9	$	12,853	$	113
SBA securities	-		-		-	2		4,691		133	2		4,691		133
State and political subdivisions	7		3,125		17	3		1,220		20	10		4,345		37
Mortgage-backed securities	27		40,868		440	-		-		-	27		40,868		440
Total	43	$	56,846	$	570	5	$	5,911	$	153	48	$	62,757	$	723

At March 31, 2016, the Company had four individual investments with a fair market value of $6.9 million that were in an unrealized loss position for less than 12 months and six individual investments with a fair market value of $8.2 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. The Company also considers 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, the Company has 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, 2016		December 31, 2015
Federal Home Loan Bank stock	$	5,173	5,005
Investment in Trust Preferred securities		403	403
Other investments		164	124
Total other investments	$	5,740	5,532

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, 2016 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, 2016, $22.7 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $25.1 million of securities were pledged to secure client deposits. At December 31, 2015, $21.3 million of securities were pledged as collateral for repurchase agreements from brokers, and approximately $11.1 million of securities were pledged to secure client deposits.