Securities

12 Months Ended

Dec. 31, 2017

Investments debt and equity securities [Abstract]

Investments In Debt And Marketable Equity Securities And Certain Trading Assets Disclosure Text Block

NOTE 5: SECURITIES

At December 31, 2017 and 2016, respectively, all securities within the scope of ASC 320, Investments – Debt and Equity Securities were classified as available-for-sale. The fair value and amortized cost for securities available-for-sale by contractual maturity atDecember 31, 2017 and 2016, respectively, are presented below.

			1 year	1 to 5	5 to 10	After 10	Fair	Gross Unrealized		Amortized
(Dollars in thousands)			or less	years	years	years	Value	Gains	Losses	Cost
December 31, 2017
Agency obligations (a)		$	—	29,253	23,809	—	53,062	79	904	$	53,887
Agency RMBS (a)			—	—	11,201	121,871	133,072	330	1,639		134,381
State and political subdivisions			—	2,564	9,999	59,000	71,563	1,616	237		70,184
	Total available-for-sale	$	—	31,817	45,009	180,871	257,697	2,025	2,780	$	258,452
December 31, 2016
Agency obligations (a)		$	3,047	22,531	19,893	—	45,471	331	973	$	46,113
Agency RMBS (a)			—	972	16,171	110,644	127,787	551	1,805	$	129,041
State and political subdivisions			—	2,480	10,210	57,624	70,314	1,509	734	$	69,539
	Total available-for-sale	$	3,047	25,983	46,274	168,268	243,572	2,391	3,512	$	244,693
(a) Includes securities issued by U.S. government agencies or government sponsored entities.

Securities with aggregate fair values of $149.4 million and $137.2 million at December 31, 2017 and 2016, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase, Federal Home Loan Bank (“FHLB”) advances, and for other purposes required or permitted by law.

Included in other assets on the accompanying consolidated balance sheets are cost-method investments. The carrying amounts of cost-method investments were $1.4 million at December 31, 2017 and 2016, respectively. Cost-method investments primarily include non-marketable equity investments, such as FHLB of Atlanta stock and Federal Reserve Bank (“FRB”) stock.

Gross Unrealized Losses and Fair Value

The fair values and gross unrealized losses on securities at December 31, 2017 and 2016, respectively, segregated by those securities that have been in an unrealized loss position for less than 12 months and 12 months or more are presented below.

			Less than 12 Months		12 Months or Longer		Total
			Fair	Unrealized	Fair	Unrealized	Fair		Unrealized
(Dollars in thousands)			Value	Losses	Value	Losses	Value		Losses
December 31, 2017:
Agency obligations		$	14,381	99	20,353	805	34,734	$	904
Agency RMBS			53,440	363	50,729	1,276	104,169		1,639
State and political subdivisions			2,009	22	10,155	215	12,164		237
	Total	$	69,830	484	81,237	2,296	151,067	$	2,780

December 31, 2016:
Agency obligations		$	20,352	973	—	—	20,352	$	973
Agency RMBS			89,062	1,805	—	—	89,062		1,805
State and political subdivisions			20,444	734	—	—	20,444		734
	Total	$	129,858	3,512	—	—	129,858	$	3,512

For the securities in the previous table, the Company does not have the intent to sell and has determined it is not more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis, which may be maturity. The Company assesses each security for credit impairment. For debt securities, the Company evaluates, where necessary, whether credit impairment exists by comparing the present value of the expected cash flows to the securities’ amortized cost basis. For cost-method investments, the Company evaluates whether an event or change in circumstances has occurred during the reporting period that may have a significant adverse effect on the fair value of the investment.

In determining whether a loss is temporary, the Company considers all relevant information including:

• the length of time and the extent to which the fair value has been less than the amortized cost basis;
• adverse conditions specifically related to the security, an industry, or a geographic area (for example, changes in the financial condition of the issuer of the security, or in the case of an asset-backed debt security, in the financial condition of the underlying loan obligors, including changes in technology or the discontinuance of a segment of the business that may affect the future earnings potential of the issuer or underlying loan obligors of the security or changes in the quality of the credit enhancement);
• the historical and implied volatility of the fair value of the security;
• the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future;
• failure of the issuer of the security to make scheduled interest or principal payments;
• any changes to the rating of the security by a rating agency; and
• recoveries or additional declines in fair value subsequent to the balance sheet date.

Agency obligations

The unrealized losses associated with agency obligations were primarily driven by changes in interest rates and not due to the credit quality of the securities. These securities were issued by U.S. government agencies or government-sponsored entities and did not have any credit losses given the explicit government guarantee or other government support.

Agency residential mortgage-backed securities (“RMBS”)

The unrealized losses associated with agency RMBS were primarily driven by changes in interest rates and not due to the credit quality of the securities. These securities were issued by U.S. government agencies or government-sponsored entities and did not have any credit losses given the explicit government guarantee or other government support.

Securities of U.S. states and political subdivisions

The unrealized losses associated with securities of U.S. states and political subdivisions were primarily driven by changes in interest rates and were not due to the credit quality of the securities. Some of these securities are guaranteed by a bond insurer, but management did not rely on the guarantee in making its investment decision. These securities will continue to be monitored as part of the Company’s quarterly impairment analysis, but are expected to perform even if the rating agencies reduce the credit rating of the bond insurers. As a result, the Company expects to recover the entire amortized cost basis of these securities.

Cost-method investments

At December 31, 2017, cost-method investments with an aggregate cost of $1.4 million were not evaluated for impairment because the Company did not identify any events or changes in circumstances that may have a significant adverse effect on the fair value of these cost-method investments.

The carrying values of the Company’s investment securities could decline in the future if the financial condition of an issuer deteriorates and the Company determines it is probable that it will not recover the entire amortized cost basis for the security. As a result, there is a risk that significant other-than-temporary impairment charges may occur in the future.

Other-Than-Temporarily Impaired Securities

Credit-impaired debt securities are debt securities where the Company has written down the amortized cost basis of a security for other-than-temporary impairment and the credit component of the loss is recognized in earnings. At December 31, 2017 and 2016, respectively, the Company had no credit-impaired debt securities and there were no additions or reductions in the credit loss component of credit-impaired debt securities during the years ended December 31, 2017 and 2016, respectively.

Realized Gains and Losses
The following table presents the gross realized gains and losses on sales related to securities.
			Year ended December 31
(Dollars in thousands)			2017	2016
Gross realized gains		$	51	166
Gross realized losses			—	(387)
	Realized gains (losses), net	$	51	(221)