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SECURITIES
3 Months Ended
Mar. 31, 2014
Investments, Debt and Equity Securities [Abstract]  
SECURITIES
SECURITIES
 
The following tables summarize the amortized cost and estimated fair values of AFS and HTM securities, as of the dates indicated: 
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
March 31, 2014
 

 
 

 
 

 
 

AFS Securities:
 
 
 
 
 
 
 
Obligations of U.S. government-sponsored enterprises
$
4,956

 
$
6

 
$

 
$
4,962

Obligations of states and political subdivisions
28,681

 
995

 
(2
)
 
29,674

Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
394,010

 
5,793

 
(5,040
)
 
394,763

Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
372,200

 
752

 
(11,613
)
 
361,339

Private issue collateralized mortgage obligations
6,838

 
40

 
(374
)
 
6,504

Total AFS securities
$
806,685

 
$
7,586

 
$
(17,029
)
 
$
797,242

HTM Securities:
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
6,973

 
$
29

 
$
(35
)
 
$
6,967

Total HTM securities
$
6,973

 
$
29

 
$
(35
)
 
$
6,967

December 31, 2013
 

 
 

 
 

 
 

AFS Securities:
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
30,143

 
$
1,075

 
$
(11
)
 
$
31,207

Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
397,409

 
5,528

 
(7,034
)
 
395,903

Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
385,847

 
912

 
(12,324
)
 
374,435

Private issue collateralized mortgage obligations
7,329

 
10

 
(407
)
 
6,932

Total AFS securities
$
820,728

 
$
7,525

 
$
(19,776
)
 
$
808,477


 
Net unrealized losses on AFS securities at March 31, 2014 and December 31, 2013 included in AOCI amounted to $6.1 million and $8.0 million, net of a deferred tax benefit of $3.3 million and $4.3 million, respectively.

During the first quarter of 2014, the Company purchased investments securities totaling $26.4 million. The Company designated $19.4 million as AFS securities and $7.0 million as HTM securities. The Company did not carry any HTM securities at December 31, 2013.
 
Impaired Securities
Management periodically reviews the Company’s investment portfolio to determine the cause, magnitude and duration of declines in the fair value of each security. Thorough evaluations of the causes of the unrealized losses are performed to determine whether the impairment is temporary or other-than-temporary in nature. Considerations such as the ability of the securities to meet cash flow requirements, levels of credit enhancements, risk of curtailment, recoverability of invested amount over a reasonable period of time, and the length of time the security is in a loss position, for example, are applied in determining OTTI. Once a decline in value is determined to be other-than-temporary, the value of the security is permanently reduced and a corresponding charge to earnings is recognized.
 
The following table presents the estimated fair values and gross unrealized losses of investment securities that were in a continuous loss position at March 31, 2014 and December 31, 2013, by length of time that individual securities in each category have been in a continuous loss position:  
 
Less Than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
March 31, 2014
 

 
 

 
 

 
 

 
 

 
 

AFS Securities:
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
631

 
$
(2
)
 
$

 
$

 
$
631

 
$
(2
)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
131,887

 
(2,760
)
 
43,244

 
(2,280
)
 
175,131

 
(5,040
)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
202,801

 
(5,901
)
 
98,773

 
(5,712
)
 
301,574

 
(11,613
)
Private issue collateralized mortgage obligations
467

 
(1
)
 
4,566

 
(373
)
 
5,033

 
(374
)
Total AFS securities
$
335,786

 
$
(8,664
)
 
$
146,583

 
$
(8,365
)
 
$
482,369

 
$
(17,029
)
HTM Securities:
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
3,183

 
$
(35
)
 
$

 
$

 
$
3,183

 
$
(35
)
Total HTM securities
$
3,183

 
$
(35
)
 
$

 
$

 
$
3,183

 
$
(35
)
December 31, 2013
 

 
 

 
 

 
 

 
 

 
 

AFS Securities:
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
2,143

 
$
(11
)
 
$

 
$

 
$
2,143

 
$
(11
)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises
145,424

 
(4,189
)
 
43,915

 
(2,845
)
 
189,339

 
(7,034
)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises
239,278

 
(7,738
)
 
73,376

 
(4,586
)
 
312,654

 
(12,324
)
Private issue collateralized mortgage obligations
122

 
(4
)
 
4,945

 
(403
)
 
5,067

 
(407
)
Total AFS securities
$
386,967

 
$
(11,942
)
 
$
122,236

 
$
(7,834
)
 
$
509,203

 
$
(19,776
)


At March 31, 2014, the Company held 92 investment securities with a fair value of $485.6 million with unrealized losses totaling $17.0 million that are considered temporary. Of these, the Company had 22 MBS and CMO investments with a fair value of $142.0 million that have been in an unrealized loss position for 12 months or more. The decline in the fair value of securities is reflective of current interest rates in excess of the yield received on investments and is not indicative of an overall credit deterioration or other factors with the Company's investment portfolio. Also, the Company held five Non-Agency investments with a fair value of $4.6 million that were in an unrealized loss position totaling $373,000 for 12 months or more. The Company's management believes the unrealized losses for the Non-Agency securities are the result of current market illiquidity and the underestimation of value in the market. Stress tests are performed regularly on the Non-Agency securities using current statistical data to determine expected cash flows and forecast potential losses. As of March 31, 2014, the results of the stress tests indicated that no OTTI write-downs were necessary on the Non-Agency securities. The Company currently has the intent and ability to retain its investment securities in an unrealized loss position until the decline in value has recovered.

Sale of Securities
The following table details the Company’s sales of AFS securities for the period indicated below:
 
Three Months Ended
March 31,
 
2014
 
2013
Proceeds from sales of securities
$
9,437

 
$
4,875

Gross realized gains
166

 
138

Gross realized losses

 


 
For the three months ended March 31, 2014 and 2013, the Company sold certain AFS securities with a total carrying value of $9.3 million and $4.7 million, respectively. For the three months ended March 31, 2014 and 2013, the Company recorded net gains on the sale of AFS securities of $166,000 and $138,000, respectively, within non-interest income in the consolidated statements of income. The Company had not previously recorded any OTTI on these securities sold.

The cost basis of securities sold is measured on a specific identification basis.

Securities Pledged
At March 31, 2014 and December 31, 2013, securities with an amortized cost of $468.6 million and $479.2 million and estimated fair values of $464.4 million and $474.7 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.
 
Contractual Maturities
The amortized cost and estimated fair values of debt securities by contractual maturity at March 31, 2014, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 
 
Amortized
Cost
 
Fair
Value
AFS Securities
 
 
 
Due in one year or less
$
875

 
$
891

Due after one year through five years
30,121

 
30,671

Due after five years through ten years
159,389

 
160,327

Due after ten years
616,300

 
605,353

 
$
806,685

 
$
797,242

HTM Securities
 
 
 
Due in one year or less
$

 
$

Due after one year through five years

 

Due after five years through ten years
1,188

 
1,177

Due after ten years
5,785

 
5,790

 
$
6,973

 
$
6,967