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Investments
 3 Months Ended
Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities [Text Block]
2.
Investments
 
A summary of investment securities available-for-sale is as follows:
 
 
 
As of March 31, 2016
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
Amortized
 
unrealized
 
unrealized
 
Estimated
 
(Dollars in thousands)
 
cost
 
gains
 
losses
 
fair value
 
 
 
 
 
 
 
 
 
 
 
U. S. treasury securities
 
$
6,014
 
$
30
 
$
-
 
$
6,044
 
U. S. federal agency obligations
 
 
30,030
 
 
202
 
 
(26)
 
 
30,206
 
Municipal obligations, tax exempt
 
 
147,788
 
 
3,365
 
 
(96)
 
 
151,057
 
Municipal obligations, taxable
 
 
81,879
 
 
1,441
 
 
(80)
 
 
83,240
 
Agency mortgage-backed securities
 
 
90,855
 
 
1,206
 
 
(47)
 
 
92,014
 
Common stocks
 
 
580
 
 
792
 
 
-
 
 
1,372
 
Certificates of deposit
 
 
9,700
 
 
-
 
 
-
 
 
9,700
 
Total
 
$
366,846
 
$
7,036
 
$
(249)
 
$
373,633
 
 
 
 
As of December 31, 2015
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
unrealized
 
unrealized
 
Estimated
 
(Dollars in thousands)
 
cost
 
gains
 
losses
 
fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U. S. treasury securities
 
$
6,517
 
$
1
 
$
(1)
 
$
6,517
 
U. S. federal agency obligations
 
 
30,064
 
 
43
 
 
(187)
 
 
29,920
 
Municipal obligations, tax exempt
 
 
135,341
 
 
2,671
 
 
(71)
 
 
137,941
 
Municipal obligations, taxable
 
 
81,999
 
 
472
 
 
(581)
 
 
81,890
 
Agency mortgage-backed securities
 
 
85,829
 
 
391
 
 
(235)
 
 
85,985
 
Common stocks
 
 
580
 
 
906
 
 
-
 
 
1,486
 
Certificates of deposit
 
 
9,699
 
 
-
 
 
-
 
 
9,699
 
Total
 
$
350,029
 
$
4,484
 
$
(1,075)
 
$
353,438
 
 
The tables above show that some of the securities in the available-for-sale investment portfolio had unrealized losses, or were temporarily impaired, as of March 31, 2016 and December 31, 2015. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date. Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.
 
 
 
 
 
As of March 31, 2016
 
(Dollars in thousands)
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
 
 
No. of
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
securities
 
value
 
losses
 
value
 
losses
 
value
 
losses
 
U.S. federal agency obligations
 
 
4
 
$
5,489
 
$
(9)
 
$
3,189
 
$
(17)
 
$
8,678
 
$
(26)
 
Municipal obligations, tax exempt
 
 
45
 
 
14,384
 
 
(91)
 
 
923
 
 
(5)
 
 
15,307
 
 
(96)
 
Municipal obligations, taxable
 
 
20
 
 
6,077
 
 
(29)
 
 
4,690
 
 
(51)
 
 
10,767
 
 
(80)
 
Agency mortgage-backed securities
 
 
20
 
 
5,295
 
 
(13)
 
 
2,697
 
 
(34)
 
 
7,992
 
 
(47)
 
Total
 
 
89
 
$
31,245
 
$
(142)
 
$
11,499
 
$
(107)
 
$
42,744
 
$
(249)
 
 
 
 
 
As of December 31, 2015
 
(Dollars in thousands)
 
 
Less than 12 months
 
12 months or longer
 
Total
 
 
 
No. of
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
securities
 
value
 
losses
 
value
 
losses
 
value
 
losses
 
U.S. treasury securities
 
 
2
 
$
3,542
 
$
(1)
 
$
-
 
$
-
 
$
3,542
 
$
(1)
 
U. S. federal agency obligations
 
 
18
 
 
23,015
 
 
(163)
 
 
1,976
 
 
(24)
 
 
24,991
 
 
(187)
 
Municipal obligations, tax exempt
 
 
47
 
 
11,328
 
 
(53)
 
 
2,132
 
 
(18)
 
 
13,460
 
 
(71)
 
Municipal obligations, taxable
 
 
105
 
 
38,605
 
 
(494)
 
 
5,068
 
 
(87)
 
 
43,673
 
 
(581)
 
Agency mortgage-backed securities
 
 
40
 
 
29,814
 
 
(166)
 
 
2,925
 
 
(69)
 
 
32,739
 
 
(235)
 
Total
 
 
212
 
$
106,304
 
$
(877)
 
$
12,101
 
$
(198)
 
$
118,405
 
$
(1,075)
 
 
The Company’s U.S. federal agency portfolio consists of securities issued by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Bank (“FHLB”). The receipt of principal and interest on U.S. federal agency obligations is guaranteed by the respective government-sponsored agency guarantor, such that the Company believes that its U.S. federal agency obligations do not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the U.S. federal agency obligations identified in the tables above were temporarily impaired as of the March 31, 2016 and December 31, 2015.
 
The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of March 31, 2016, the Company did not intend to sell and it is more likely than not that the Company will not be required to sell its municipal obligations in an unrealized loss position until the recovery of its cost. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of the March 31, 2016 and December 31, 2015.
 
The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of FHLMC, FNMA and the Government National Mortgage Association. The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the tables above were temporarily impaired as of the March 31, 2016 and December 31, 2015.
 
The table below sets forth amortized cost and fair value of investment securities at March 31, 2016.
 
The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.
 
(Dollars in thousands)
 
Amortized
 
Estimated
 
 
 
cost
 
fair value
 
Due in less than one year
 
$
14,272
 
$
14,331
 
Due after one year but within five years
 
 
188,060
 
 
189,870
 
Due after five years but within ten years
 
 
90,495
 
 
92,970
 
Due after ten years
 
 
73,439
 
 
75,090
 
Common stocks
 
 
580
 
 
1,372
 
Total
 
$
366,846
 
$
373,633
 
 
Sales proceeds and gross realized gains and losses on sales of available-for-sale securities are as follows:
 
(Dollars in thousands)
 
Three months ended March 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Sales proceeds
 
$
1,817
 
$
19,069
 
 
 
 
 
 
 
 
 
Realized gains
 
$
16
 
$
24
 
Realized losses
 
 
(4)
 
 
(278)
 
Net realized gains (losses)
 
$
12
 
$
(254)
 
 
Securities with carrying values of $187.2 million and $171.6 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at March 31, 2016 and December 31, 2015, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.