Investment Securities (Tables)

3 Months Ended

Mar. 31, 2014

Unrealized gains on investment securities

The following tables present information related to the Corporation’s investment securities at March 31, 2014 and December 31, 2013.

	March 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

	(dollars in thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	14,361	$	—	$	(465)	$	13,896
Federal agency obligations		23,381		23		(314)		23,090
Residential mortgage pass-through securities		46,354		936		(102)		47,188
Commercial mortgage pass-through securities		3,079		—		(116)		2,963
Obligations of U.S. states and political subdivisions		14,353		586		—		14,939
Trust preferred securities		19,764		329		(296)		19,797
Corporate bonds and notes		136,152		5,647		(148)		141,651
Asset-backed securities		15,386		168		—		15,554
Certificates of deposit		2,100		38		(9)		2,129
Equity securities		376		—		(84)		292
Mutual funds and money market funds		6,141		—		(169)		5,972
Total	$	281,447	$	7,727	$	(1,703)	$	287,471

Investment Securities Held-to-Maturity:
U.S. Treasury and agency securities	$	28,108	$	—	$	(315)	$	27,793
Federal agency obligations		14,521		106		(71)		14,556
Residential mortgage pass-through securities		2,160		—		(35)		2,125
Commercial mortgage pass-through securities		4,379		59		(39)		4,399
Obligations of U.S. states and political subdivisions		127,111		2,389		(1,685)		127,815
Corporate bonds and notes		37,912		410		(58)		38,264
Total	$	214,191	$	2,964	$	(2,203)	$	214,952

Total investment securities	$	495,638	$	10,691	$	(3,906)	$	502,423


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

	December 31, 2013
	(dollars in thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	14,344	$	—	$	(825)	$	13,519
Federal agency obligations		20,567		29		(655)		19,941
Residential mortgage pass-through securities		48,312		791		(229)		48,874
Commercial mortgage pass-through securities		7,145		3		(157)		6,991
Obligations of U.S. states and political subdivisions		30,804		711		(55)		31,460
Trust preferred securities		19,763		150		(510)		19,403
Corporate bonds and notes		154,182		4,930		(482)		158,630
Asset-backed securities		15,733		246		—		15,979
Certificates of deposit		2,250		32		(20)		2,262
Equity securities		376		—		(89)		287
Mutual funds and money market funds		5,671		68		(15)		5,724
Total	$	319,147	$	6,960	$	(3,037)	$	323,070
Investment Securities Held-to-Maturity:
U.S. Treasury and agency securities	$	28,056	$	—	$	(1,019)	$	27,037
Federal agency obligations		15,249		23		(389)		14,883
Residential mortgage-backed securities		2,246		—		(64)		2,182
Commercial mortgage-backed securities		4,417		41		(62)		4,396
Obligations of U.S. states and political subdivisions		127,418		1,303		(3,688)		125,033
Corporate bonds and notes		37,900		149		(622)		37,427
Total	$	215,286	$	1,516	$	(5,844)	$	210,958
Total investment securities	$	534,433	$	8,476	$	(8,881)	$	534,028

Investments classified by maturity date

The following table presents information for investment securities available-for-sale at March 31, 2014, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.

	March 31, 2014
	Amortized Cost		Fair Value
	(in thousands)
Investment Securities Available-for-Sale :
Due in one year or less	$	5,569	$	5,596
Due after one year through five years		50,584		51,839
Due after five years through ten years		121,166		125,250
Due after ten years		48,178		48,371
Residential mortgage pass-through securities		46,354		47,188
Commercial mortgage pass-through securities		3,079		2,963
Equity securities		376		292
Mutual funds and money market funds		6,141		5,972
Total	$	281,447	$	287,471
Investment Securities Held-to-Maturity :
Due in one year or less	$	2,056	$	2,060
Due after one year through five years		12,946		13,204
Due after five years through ten years		68,449		68,440
Due after ten years		124,201		124,724
Residential mortgage-backed securities		2,160		2,125
Commercial mortgage pass-through securities		4,379		4,399
Total	$	214,191	$	214,952

Total investment securities	$	495,638	$	502,423

Schedule of Realized Gains and Losses

Gross gains and losses from the sales of investment securities for the three month periods ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
(in thousands)	2014		2013
Gross gains on sales of investment securities	$	1,432	$	432
Gross losses on sales of investment securities		(17)		(89)
Net gains on sales of investment securities	$	1,415	$	343

Schedule of OTTI Charges for period

The following summarizes OTTI charges for the periods indicated.

	Three Months Ended
	March 31,
(in thousands)	2014		2013
Principal losses on a variable rate CMO	$	—	$	24
Total other-than-temporary impairment charges	$	—	$	24

Schedule of preferred security and associated ratings

The following table presents detailed information for each trust preferred security held by the Corporation at March 31, 2014 which has at least one rating below investment grade.

Deal Name	Single Issuer or Pooled	Class/ Tranche	Amortized Cost		Fair Value		Gross Unrealized Gain (Loss)		Lowest Credit Rating Assigned	Number of Banks Currently Performing	Deferrals and Defaults as % of Original Collateral	Expected Deferral/Defaults as % of Remaining Performing Collateral
	(dollars in thousands)
Countrywide Capital IV	Single	—	$	1,771	$	1,805	$	34	BB+	1	None	None
Countrywide Capital V	Single	—		2,747		2,803		56	BB+	1	None	None
Countrywide Capital V	Single	—		250		255		5	BB+	1	None	None
Citigroup Cap IX	Single	—		992		1,011		19	BB	1	None	None
Citigroup Cap IX	Single	—		1,907		1,952		45	BB	1	None	None
Citigroup Cap XI	Single	—		246		251		5	BB	1	None	None
Nationsbank Cap Trust III	Single	—		1,574		1,278		(296)	BB+	1	None	None
Morgan Stanley Cap Trust IV	Single	—		2,500		2,506		6	BB+	1	None	None
Morgan Stanley Cap Trust IV	Single	—		1,742		1,752		10	BB+	1	None	None
Saturns — GS 2004-04	Single	—		535		535		—	BB+	1	None	None
Goldman Sachs	Single	—		1,000		1,032		32	BB+	1	None	None
Stifel Financial	Single	—		4,500		4,617		117	BBB-	1	None	None
Total			$	19,764	$	19,797	$	33

Credit loss portion of OTTI recognized in earnings on debt securities

Credit Loss Portion of OTTI Recognized in Earnings on Debt Securities

	Three Months Ended March 31, 2014		Year Ended December 31, 2013
	(in thousands)
Balance of credit-related OTTI at January 1,	$	—	$	4,450
Addition:
Credit losses on investment securities for which other-than-temporary impairment was not previously recognized		—		652
Reduction:
Credit losses on investment securities sold during the period		—		(5,102)
Balance of credit-related OTTI at period end	$	—	$	—

Schedule of unrealized losses not recognized in income

The following tables indicate gross unrealized losses not recognized in income and fair value, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position at March 31, 2014 and December 31, 2013:

	March 31, 2014
	Total				Less than 12 Months				12 Months or Longer
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

	(in thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	13,896	$	(465)	$	13,896	$	(465)	$	—	$	—
Federal agency obligations		19,508		(314)		19,032		(275)		476		(39)
Residential mortgage pass-through securities		5,344		(102)		5,344		(102)		—		—
Commercial mortgage pass-through securities		2,963		(116)		2,963		(116)		—		—
Trust preferred securities		1,278		(296)		—		—		1,278		(296)
Corporate bonds and notes		13,387		(148)		11,440		(112)		1,947		(36)
Certificates of deposit		415		(9)		415		(9)		—		—
Equity securities		292		(84)		—		—		292		(84)
Mutual funds and money market funds		5,330		(169)		4,355		(145)		975		(24)
Total		62,413		(1,703)		57,445		(1,224)		4,968		(479)
Investment Securities Held-to-Maturity:
U.S. Treasury and agency securities		27,793		(315)		27,793		(315)		—		—
Federal agency obligations		5,751		(71)		5,751		(71)		—		—
Residential mortgage pass-through securities		2,125		(35)		2,125		(35)		—		—
Commercial mortgage pass-through securities		1,402		(39)		1,402		(39)		—		—
Obligations of U.S. states and political subdivisions		57,017		(1,685)		39,474		(960)		17,543		(725)
Corporate bonds and notes		11,396		(58)		11,396		(58)		—		—
Total		105,484		(2,203)		87,941		(1,478)		17,543		(725)
Total Temporarily Impaired Securities	$	167,897	$	(3,906)	$	145,386	$	(2,702)	$	22,511	$	(1,204)

	December 31, 2013
	Total				Less than 12 Months				12 Months or Longer
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	13,519	$	(825)	$	13,519	$	(825)	$	—	$	—
Federal agency obligation		17,200		(655)		17,200		(655)		—		—
Residential mortgage pass-through securities		18,293		(229)		18,293		(229)		—		—
Commercial mortgage pass-through securities		2,924		(157)		2,924		(157)		—		—
Obligations of U.S. states and political subdivisions		4,199		(55)		4,199		(55)		—		—
Trust preferred securities		5,306		(510)		4,031		(211)		1,275		(299)
Corporate bonds and notes		32,498		(482)		30,533		(448)		1,965		(34)
Certificates of deposit		552		(20)		552		(20)		—		—
Equity securities		287		(89)		—		—		287		(89)
Mutual funds and money market funds		985		(15)		—		—		985		(15)
Total		95,763		(3,037)		91,251		(2,600)		4,512		(437)
Investment Securities Held-to-Maturity:
U.S. Treasury and agency securities	$	27,037	$	(1,019)	$	27,037	$	(1,019)	$	—	$	—
Federal agency obligation		13,492		(389)		13,197		(388)		295		(1)
Residential mortgage pass-through securities		2,182		(64)		2,182		(64)		—		—
Commercial mortgage pass-through securities		1,395		(62)		1,395		(62)		—		—
Obligations of U.S. states and political subdivisions		66,034		(3,688)		57,072		(2,957)		8,962		(731)
Corporate bonds and notes		27,210		(622)		27,210		(622)		—		—
Total		137,350		(5,844)		128,093		(5,112)		9,257		(732)
Total Temporarily Impaired Securities	$	233,113	$	(8,881)	$	219,344	$	(7,712)	$	13,769	$	(1,169)

- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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