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Securities Available for Sale
6 Months Ended
Jun. 30, 2014
Available-for-sale Securities [Abstract]  
Securities Available for Sale
Securities Available for Sale
The following is a summary of securities available for sale as of the dates indicated:
 
 
At June 30, 2014
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
(In thousands)
Debt securities:
 
 
 
 
 
 
 
U.S. Government agency and U.S. Government sponsored enterprises
 
 
 
 
 
 
 
Collateralized mortgage obligations
$
291,676

 
$
1,564

 
$
(5,102
)
 
$
288,138

Mortgage-backed securities
427,237

 
6,940

 
(2,983
)
 
431,194

Trust preferred securities
4,524

 

 
(536
)
 
3,988

Municipal bonds
5,675

 
448

 
(29
)
 
6,094

Total debt securities
729,112

 
8,952

 
(8,650
)
 
729,414

Mutual funds
17,425

 

 
(156
)
 
17,269

 
$
746,537

 
$
8,952

 
$
(8,806
)
 
$
746,683

 
 
 
 
 
 
 
 
 
At December 31, 2013
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
(In thousands)
Debt securities:
 
 
 
 
 
 
 
U.S. Government agency and U.S. Government sponsored enterprises
 
 
 
 
 
 
 
Collateralized mortgage obligations
$
286,608

 
$
1,104

 
$
(13,611
)
 
$
274,101

Mortgage-backed securities
409,165

 
3,620

 
(7,789
)
 
404,996

Trust preferred securities
4,516

 

 
(819
)
 
3,697

Municipal bonds
5,687

 
319

 
(70
)
 
5,936

Total debt securities
705,976

 
5,043

 
(22,289
)
 
688,730

Mutual funds
17,425

 

 
(404
)
 
17,021

 
$
723,401

 
$
5,043

 
$
(22,693
)
 
$
705,751

 
As of June 30, 2014 and December 31, 2013, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders' equity.
For the three months ended June 30, 2014 and 2013, $6.7 million of unrealized gains and $19.7 million of unrealized losses, respectively, were included in accumulated other comprehensive income during the periods. For the six months ended June 30, 2014 and 2013, $17.8 million of unrealized gains and $23.4 million of unrealized losses, respectively, were included in accumulated other comprehensive income during the periods. A total of $0 and $54 thousand of net gains on sales of securities were reclassified out of accumulated other comprehensive income into earnings for the six months ended June 30, 2014 and 2013, respectively. There were no securities sold during the three months ended June 30, 2014 and 2013.
The proceeds from sales of securities and the associated gross gains and losses recorded in earnings are listed below:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
 
(In thousands)
Proceeds
$

 
$

 
$

 
$
6,636

Gross gains

 

 

 
54

Gross losses

 

 

 



The amortized cost and estimated fair value of debt securities at June 30, 2014, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
 
 
Amortized
Cost
 
Estimated
Fair Value
 
(In thousands)
Available for sale:
 
 
 
Due within one year
$

 
$

Due after one year through five years
340

 
348

Due after five years through ten years
3,884

 
4,292

Due after ten years
5,975

 
5,442

U.S. Government agency and U.S. Government sponsored enterprises
 
 
 
Collateralized mortgage obligations
291,676

 
288,138

Mortgage-backed securities
427,237

 
431,194

Mutual funds
17,425

 
17,269

 
$
746,537

 
$
746,683



Securities with carrying values of approximately $356.8 million and $360.6 million at June 30, 2014 and December 31, 2013, respectively, were pledged to secure public deposits, various borrowings and for other purposes as required or permitted by law.
The following table shows our investments’ gross unrealized losses and estimated fair value, aggregated by investment category and the length of time that the individual securities have been in a continuous unrealized loss position as of the dates indicated.
 
As of June 30, 2014
 
Less than 12 months
 
12 months or longer
 
Total
Description of
Securities
Number of
Securities
 
Fair Value
 
Gross
Unrealized
Losses
 
Number of
Securities
 
Fair Value
 
Gross
Unrealized
Losses
 
Number of
Securities
 
Fair Value
 
Gross
Unrealized
Losses
 
 (In thousands)
Collateralized mortgage obligations*
6

 
$
44,798

 
$
(676
)
 
13

 
$
140,569

 
$
(4,426
)
 
19

 
$
185,367

 
$
(5,102
)
Mortgage-backed securities*
8

 
12,337

 
(57
)
 
14

 
90,980

 
(2,926
)
 
22

 
103,317

 
(2,983
)
Trust preferred securities

 

 

 
1

 
3,988

 
(536
)
 
1

 
3,988

 
(536
)
Municipal bonds

 

 

 
1

 
1,141

 
(29
)
 
1

 
1,141

 
(29
)
Mutual funds

 

 

 
1

 
13,269

 
(156
)
 
1

 
13,269

 
(156
)
 
14

 
$
57,135

 
$
(733
)
 
30

 
$
249,947

 
$
(8,073
)
 
44

 
$
307,082

 
$
(8,806
)
* Investments in U.S. Government agency and U.S. Government sponsored enterprises

 
As of December 31, 2013
 
Less than 12 months
 
12 months or longer
 
Total
Description of
Securities
Number of
Securities
 
Fair Value
 
Gross
Unrealized
Losses
 
Number of
Securities
 
Fair Value
 
Gross
Unrealized
Losses
 
Number of
Securities
 
Fair Value
 
Gross
Unrealized
Losses
 
 (In thousands)
Collateralized mortgage obligations*
21

 
$
198,713

 
$
(12,460
)
 
3

 
$
13,381

 
$
(1,151
)
 
24

 
$
212,094

 
$
(13,611
)
Mortgage-backed securities*
29

 
203,276

 
(7,293
)
 
7

 
14,793

 
(496
)
 
36

 
218,069

 
(7,789
)
Trust Preferred securities

 

 

 
1

 
3,697

 
(819
)
 
1

 
3,697

 
(819
)
Municipal bonds
1

 
1,112

 
(70
)
 

 

 

 
1

 
1,112

 
(70
)
Mutual funds
1

 
13,021

 
(404
)
 

 

 

 
1

 
13,021

 
(404
)
 
52

 
$
416,122

 
$
(20,227
)
 
11

 
$
31,871

 
$
(2,466
)
 
63

 
$
447,993

 
$
(22,693
)

* Investments in U.S. Government agency and U.S. Government sponsored enterprises
The Company evaluates securities for other-than-temporary-impairment ("OTTI") on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair values of the securities have been less than the cost of the securities, and management's intention to sell, or whether it is more likely than not that management will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. In analyzing an issuer’s financial condition, the Company considers, among other considerations, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.
The Company has certain trust preferred securities and U.S. Government agency and U.S. Government sponsored enterprise collateralized mortgage obligations that were in a continuous unrealized loss position for twelve months or longer as of June 30, 2014. The trust preferred securities at June 30, 2014 had an amortized cost of $4.5 million and an unrealized loss of $536 thousand at June 30, 2014. The trust preferred securities are scheduled to mature in May 2047. These securities are rated investment grade and there are no credit quality concerns with the obligor. Certain of the Company's U.S. Government agency and U.S. Government sponsored enterprise investments were in an unrealized loss position at June 30, 2014. All of the Company's U.S. Government agency and U.S. Government sponsored enterprise investments have high credit ratings of "AA" grade or better. Interest on the trust preferred securities and the U.S. Government agency and U.S. Government sponsored enterprise investments have been paid as agreed, and management believes this will continue in the future and that the securities will be repaid in full as scheduled. The market value declines for these securities are deemed to be due to the current market volatility and are not reflective of management’s expectations of its ability to fully recover these investments, which may be at maturity. For these reasons, no OTTI was recognized on the trust preferred securities and the U.S. Government agency and U.S. Government sponsored collateralized mortgage obligations and mortgage-backed securities that are in an unrealized loss position at June 30, 2014.
The Company considers the losses on the investments in unrealized loss positions at June 30, 2014 to be temporary based on: 1) the likelihood of recovery; 2) the information relative to the extent and duration of the decline in market value; and 3) the Company’s intention not to sell, and management's determination that it is more likely than not that management will not be required to sell a security in an unrealized loss position before recovery of its amortized cost basis.