Investment Securities |
Investment Securities The amortized cost, gross unrealized gains and losses, and fair values of investment securities available for sale at June 30, 2017 and December 31, 2016 are as follows: | | | | | | | | | | | | | | | | | | | | June 30, 2017 | | | | | Gross | | Gross | | | | | Amortized | | Unrealized | | Unrealized | | Fair | (In Thousands) | | Cost | | Gains | | Losses | | Value | Available for sale (AFS): | | |
| | |
| | |
| | |
| Mortgage-backed securities | | $ | 4,649 |
| | $ | 83 |
| | $ | (106 | ) | | $ | 4,626 |
| State and political securities | | 69,091 |
| | 1,006 |
| | (130 | ) | | 69,967 |
| Other debt securities | | 53,671 |
| | 135 |
| | (1,650 | ) | | 52,156 |
| Total debt securities | | 127,411 |
| | 1,224 |
| | (1,886 | ) | | 126,749 |
| Financial institution equity securities | | 9,818 |
| | 679 |
| | — |
| | 10,497 |
| Non-financial institution equity securities | | 1,300 |
| | — |
| | (42 | ) | | 1,258 |
| Total equity securities | | 11,118 |
| | 679 |
| | (42 | ) | | 11,755 |
| Total investment securities AFS | | $ | 138,529 |
| | $ | 1,903 |
| | $ | (1,928 | ) | | $ | 138,504 |
|
| | | | | | | | | | | | | | | | | | | | December 31, 2016 | | | | | Gross | | Gross | | | | | Amortized | | Unrealized | | Unrealized | | Fair | (In Thousands) | | Cost | | Gains | | Losses | | Value | Available for sale (AFS): | | |
| | |
| | |
| | |
| Mortgage-backed securities | | $ | 9,295 |
| | $ | 182 |
| | $ | (164 | ) | | $ | 9,313 |
| Asset-backed securities | | 109 |
| | — |
| | — |
| | 109 |
| State and political securities | | 60,777 |
| | 666 |
| | (509 | ) | | 60,934 |
| Other debt securities | | 53,046 |
| | 137 |
| | (2,065 | ) | | 51,118 |
| Total debt securities | | 123,227 |
| | 985 |
| | (2,738 | ) | | 121,474 |
| Financial institution equity securities | | 9,566 |
| | 969 |
| | — |
| | 10,535 |
| Non-financial institution equity securities | | 1,667 |
| | — |
| | (184 | ) | | 1,483 |
| Total equity securities | | 11,233 |
| | 969 |
| | (184 | ) | | 12,018 |
| Total investment securities AFS | | $ | 134,460 |
| | $ | 1,954 |
| | $ | (2,922 | ) | | $ | 133,492 |
|
The amortized cost and fair values of trading investment securities at June 30, 2017 and December 31, 2016 are as follows.
| | | | | | | | | | | | | | | | | | | | June 30, 2017 | | | | | Gross | | Gross | | | | | Amortized | | Unrealized | | Unrealized | | Fair | (In Thousands) | | Cost | | Gains | | Losses | | Value | Trading: | | | | | | | | | Financial institution equity securities | | $ | 61 |
| | $ | 1 |
| | $ | — |
| | $ | 62 |
| Non-financial institution equity securities | | 157 |
| | — |
| | (6 | ) | | 151 |
| Total trading securities | | $ | 218 |
| | $ | 1 |
| | $ | (6 | ) | | $ | 213 |
|
| | | | | | | | | | | | | | | | | | | | December 31, 2016 | | | | | Gross | | Gross | | | | | Amortized | | Unrealized | | Unrealized | | Fair | (In Thousands) | | Cost | | Gains | | Losses | | Value | Trading: | | | | | | | | | Financial institution equity securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| Non-financial institution equity securities | | $ | 56 |
| | $ | 2 |
| | $ | — |
| | $ | 58 |
| Total trading securities | | $ | 56 |
| | $ | 2 |
| | $ | — |
| | $ | 58 |
|
Total net trading gains of $0 and $2,000 for the three and six month periods ended June 30, 2017 compared to net trading gains of $6,000 and $46,000 for the three and six month periods ended June 30, 2016 were included in the Consolidated Statement of Income.
The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at June 30, 2017 and December 31, 2016.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2017 | | | Less than Twelve Months | | Twelve Months or Greater | | Total | | | | | Gross | | | | Gross | | | | Gross | | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | (In Thousands) | | Value | | Losses | | Value | | Losses | | Value | | Losses | Available for sale (AFS): | | | | | | | | | | | | | Mortgage-backed securities | | $ | 3,415 |
| | $ | (106 | ) | | $ | — |
| | $ | — |
| | $ | 3,415 |
| | $ | (106 | ) | State and political securities | | 12,175 |
| | (130 | ) | | — |
| | — |
| | 12,175 |
| | (130 | ) | Other debt securities | | 30,906 |
| | (914 | ) | | 11,297 |
| | (736 | ) | | 42,203 |
| | (1,650 | ) | Total debt securities | | 46,496 |
| | (1,150 | ) | | 11,297 |
| | (736 | ) | | 57,793 |
| | (1,886 | ) | Financial institution equity securities | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Non-financial institution equity securities | | 1,258 |
| | (42 | ) | | — |
| | — |
| | 1,258 |
| | (42 | ) | Total equity securities | | 1,258 |
| | (42 | ) | | — |
| | — |
| | 1,258 |
| | (42 | ) | Total investment securities AFS | | $ | 47,754 |
| | $ | (1,192 | ) | | $ | 11,297 |
| | $ | (736 | ) | | $ | 59,051 |
| | $ | (1,928 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2016 | | | Less than Twelve Months | | Twelve Months or Greater | | Total | | | | | Gross | | | | Gross | | | | Gross | | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | (In Thousands) | | Value | | Losses | | Value | | Losses | | Value | | Losses | Available for sale (AFS): | | | | | | | | | | | | | Mortgage-backed securities | | $ | 3,572 |
| | $ | (106 | ) | | $ | 3,627 |
| | $ | (58 | ) | | $ | 7,199 |
| | $ | (164 | ) | State and political securities | | 26,113 |
| | (509 | ) | | — |
| | — |
| | 26,113 |
| | (509 | ) | Other debt securities | | 28,140 |
| | (1,179 | ) | | 12,240 |
| | (886 | ) | | 40,380 |
| | (2,065 | ) | Total debt securities | | 57,825 |
| | (1,794 | ) | | 15,867 |
| | (944 | ) | | 73,692 |
| | (2,738 | ) | Financial institution equity securities | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Non-financial institution equity securities | | 727 |
| | (140 | ) | | 756 |
| | (44 | ) | | 1,483 |
| | (184 | ) | Total equity securities | | 727 |
| | (140 | ) | | 756 |
| | (44 | ) | | 1,483 |
| | (184 | ) | Total investment securities AFS | | $ | 58,552 |
| | $ | (1,934 | ) | | $ | 16,623 |
| | $ | (988 | ) | | $ | 75,175 |
| | $ | (2,922 | ) |
At June 30, 2017 there were a total of 54 securities in a continuous unrealized loss position for less than twelve months and 7 individual securities that were in a continuous unrealized loss position for twelve months or greater.
The Company reviews its position quarterly and has determined that, at June 30, 2017, the declines outlined in the above table represent temporary declines and the Company does not intend to sell and does not believe it will be required to sell these securities before recovery of their cost basis, which may be at maturity. The Company has concluded that the unrealized losses disclosed above are not other than temporary but are the result of interest rate changes, sector credit ratings changes, or company-specific ratings changes that are not expected to result in the non-collection of principal and interest during the period.
The amortized cost and fair value of debt securities at June 30, 2017, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| | | | | | | | | | (In Thousands) | | Amortized Cost | | Fair Value | Due in one year or less | | $ | 2,140 |
| | $ | 2,140 |
| Due after one year to five years | | 46,434 |
| | 45,944 |
| Due after five years to ten years | | 63,600 |
| | 63,222 |
| Due after ten years | | 15,237 |
| | 15,443 |
| Total | | $ | 127,411 |
| | $ | 126,749 |
|
Total gross proceeds from sales of securities available for sale for the three and six months ended June 30, 2017 were $6,478,000 and $9,130,000, a decrease from the 2016 totals of $16,168,000 and $36,007,000.
The following table represents gross realized gains and losses within the available for sale portfolio: | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | (In Thousands) | | 2017 | | 2016 | | 2017 | | 2016 | Gross realized gains: | | |
| | |
| | |
| | |
| Mortgage-backed securities | | $ | 24 |
| | $ | 6 |
| | 69 |
| | 6 |
| State and political securities | | 15 |
| | 339 |
| | 29 |
| | 638 |
| Other debt securities | | — |
| | 226 |
| | — |
| | 258 |
| Financial institution equity securities | | — |
| | — |
| | 288 |
| | 82 |
| Non-financial institution equity securities | | — |
| | — |
| | — |
| | 144 |
| Total gross realized gains | | $ | 39 |
| | $ | 571 |
| | $ | 386 |
| | $ | 1,128 |
| | | | | | | | | | Gross realized losses: | | |
| | |
| | |
| | |
| U.S. Government and agency securities | | $ | — |
| | $ | 3 |
| | $ | — |
| | $ | 3 |
| Mortgage-backed securities | | — |
| | — |
| | — |
| | — |
| Asset-backed securities | | — |
| | — |
| | — |
| | — |
| State and political securities | | — |
| | — |
| | — |
| | — |
| Other debt securities | | 51 |
| | 82 |
| | 51 |
| | 163 |
| Financial institution equity securities | | — |
| | — |
| | — |
| | — |
| Non-financial institution equity securities | | — |
| | — |
| | 150 |
| | 41 |
| Total gross realized losses | | $ | 51 |
| | $ | 85 |
| | $ | 201 |
| | $ | 207 |
|
The following table represents gross realized gains and losses within the trading portfolios:
| | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | (In Thousands) | | 2017 | | 2016 | | 2017 | | 2016 | Gross realized gains: | | |
| | |
| | |
| | |
| Financial institution equity securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 6 |
| Non-financial institution equity securities | | 6 |
| | 9 |
| | 8 |
| | 68 |
| Total gross realized gains | | $ | 6 |
| | $ | 9 |
| | $ | 8 |
| | $ | 74 |
| | | | | | | | | | Gross realized losses: | | |
| | |
| | |
| | |
| Financial institution equity securities | | $ | — |
| | $ | 3 |
| | $ | — |
| | $ | 16 |
| Non-financial institution equity securities | | 6 |
| | — |
| | 6 |
| | 12 |
| Total gross realized losses | | $ | 6 |
| | $ | 3 |
| | $ | 6 |
| | $ | 28 |
|
There were no impairment charges included in gross realized losses for the three and six months ended June 30, 2017 and 2016, respectively.
Investment securities with a carrying value of approximately $103,864,000 and $95,199,000 at June 30, 2017 and December 31, 2016, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law.
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