Investments (Tables)

9 Months Ended

Sep. 30, 2015

Aggregate Carrying And Approximate Market Values Of Available-For-Sale Securities

The amortized cost and estimated fair values of the Company's securities are shown in the following table (in thousands):



	September 30, 2015								December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
U.S. Treasuries and U.S.
government agencies	$	5	$	—	$	—	$	5	$	1,816	$	11	$	—	$	1,827
Obligations of states and
political subdivisions	42,254		466		18		42,702		41,382		722		8		42,096
Mortgage-backed securities:
U.S. government agencies	225,382		3,686		1,121		227,947		185,831		3,470		1,973		187,328
Private label	1,276		4		1		1,279		1,700		8		4		1,704
Trust preferred
securities	7,578		459		1,080		6,957		9,763		425		1,152		9,036
Corporate securities	17,758		182		597		17,343		7,806		204		693		7,317
Total Debt Securities	294,253		4,797		2,817		296,233		248,298		4,840		3,830		249,308
Marketable equity securities	2,131		972		—		3,103		2,131		1,082		—		3,213
Investment funds	1,525		4		—		1,529		1,525		—		3		1,522
Total Securities
Available-for-Sale	$	297,909	$	5,773	$	2,817	$	300,865	$	251,954	$	5,922	$	3,833	$	254,043

Aggregate Carrying And Approximate Market Values Of Held-To-Maturity Securities



	September 30, 2015								December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities held-to-maturity
Mortgage-backed securities
US government agencies	$	77,095	$	2,910	$	—	$	80,005	$	86,742	$	2,733	$	—	$	89,475
Trust preferred securities	4,000		—		—		4,000		4,044		672		—		4,716
Total Securities
Held-to-Maturity	$	81,095	$	2,910	$	—	$	84,005	$	90,786	$	3,405	$	—	$	94,191

Other investment securities:
Non-marketable equity securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857
Total Other Investment
Securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857

Gross Unrealized Losses And Fair Value Of Investments

The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):



	September 30, 2015
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	2,670	$	13	$	125	$	5	$	2,795	$	18
Mortgage-backed securities:
U.S. Government agencies	16,782		102		35,607		1,019		52,389		1,121
Private label	1,005		1		—		—		1,005		1
Trust preferred securities	1,015		16		4,857		1,064		5,872		1,080
Corporate securities	—		—		4,161		597		4,161		597
Investment funds	—		—		—		—		—		—
Total	$	21,472	$	132	$	44,750	$	2,685	$	66,222	$	2,817



	December 31, 2014
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	1,559	$	3	$	125	$	5	$	1,684	$	8
Mortgage-backed securities:
U.S. Government agencies	—		—		60,122		1,973		60,122		1,973
Private label	1,277		4		—		—		1,277		4
Trust preferred securities	—		—		4,760		1,152		4,760		1,152
Corporate securities	—		—		4,049		693		4,049		693
Investment funds	$	—	$	—	$	1,496	$	3	1,496		3
Total	$	2,836	$	7	$	70,552	$	3,826	$	73,388	$	3,833

Credit Loss Component Of OTTI On Debt Securities Recognized In Earnings

The following table presents a progression of the credit loss component of OTTI on debt and equity securities recognized in earnings during the nine months ended September 30, 2015 and for the year ended December 31, 2014 (in thousands). The credit loss component represents the difference between the present value of expected future cash flows and the amortized cost basis of the security. The credit component of OTTI recognized in earnings during a period is presented in two parts based upon whether the credit impairment in the current period is the first time the security was credit impaired (initial credit impairment) or if there is additional credit impairment on a security that was credit impaired in previous periods.



	Debt Securities			Equity Securities			Total
Balance at January 1, 2014	$	20,186		$	4,698		$	24,884
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	(3,600		)	(3,114		)	(6,714		)
Balance at December 31, 2014	16,586			1,584			18,170
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	—			—			—
Balance at September 30, 2015	$	16,586		$	1,584		$	18,170

Additional Information Of Trust Preferred Securities With Credit Rating Below Investment Grade

The following table presents additional information about the Company’s trust preferred securities with a credit rating of below investment grade as of September 30, 2015 (dollars in thousands):



Deal Name	Type	Class	Original Cost		Amortized Cost		Fair Value		Difference (1)		Lowest Credit Rating	# of issuers currently performing	Actual deferrals/defaults (as a % of original dollar)		Expected deferrals/defaults (as a % of remaining performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (3)
	Pooled trust preferred securities:
	Other-than-temporarily impaired
	Available for Sale:
P1	Pooled	Mezz	$	632	$	—	$	—	—		Caa1	5	14.5	%	—	%	⁽²⁾	—	%
P2	Pooled	Mezz	1,513		—		—		—		Ca	3	18.3	%	—	%	⁽²⁾	—	%
P3	Pooled	Mezz	2,962		1,419		1,007		(412	)	Caa3	19	20.0	%	7.1	%	⁽²⁾	—	%
P5	Pooled	Mezz	6,032		391		838		447		C	7	13.5	%	19.0	%	⁽²⁾	33.6	%
	Held to Maturity:
P6	Pooled	Mezz	1,223		—		—		—		Caa1	5	14.5	%	—	%	⁽²⁾	—	%
P7	Pooled	Mezz	2,009		—		—		—		Ca	3	18.3	%	—	%	⁽²⁾	—	%
	Single issuer trust preferred securities
	Available for sale:
S5	Single		261		235		247		12		NR	1	—	%	—	%
	Held to Maturity:
S9	Single		4,000		4,000		4,000		—		NR	1	—	%	—	%


(1)	The differences noted consist of unrealized gains (losses) recorded at September 30, 2015 and noncredit other-than-temporary impairment losses recorded subsequent to April 1, 2009 that have not been reclassified as credit losses.


(2)	Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. This model for this security assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure, thus this bond could recover at a higher percentage upon default than zero.

(3)

Excess subordination is defined as the additional defaults/deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a "break in yield." This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The "percent of current performing collateral" is the ratio of the "excess subordination amount" to current performing collateral—a higher percent means there is more excess subordination to absorb additional defaults/deferrals, and the better our security is protected from loss.

Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity

The amortized cost and estimated fair value of debt securities at September 30, 2015, by contractual maturity, are shown in the following table (in thousands). Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.



	Amortized Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	2,838	$	15,831
Due after one year through five years	14,590		14,976
Due after five years through ten years	27,168		27,464
Due after ten years	249,657		237,962
	$	294,253	$	296,233
Securities Held-to-Maturity
Due in one year or less	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	81,095		84,005
	$	81,095	$	84,005

Gross Gains And Losses Realized

Gross gains and gross losses realized by the Company from investment security transactions are summarized in the table below (in thousands). The specific identification method is used to determine the cost basis of securities sold.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014

Gross realized gains	$	—	$	71	$	2,130	$	972
Gross realized losses	—		—		—		—
Net investment security gains	$	—	$	71	$	2,130	$	972

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

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