SECURITIES

12 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

Amortized cost and estimated fair value of securities available for sale at December 31, 2015 and 2014 are as follows (in thousands):

	2015				2014
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Obligations of U.S. Government and     U.S. Government sponsored enterprises	$	99,430	$	100,166	$	180,535	$	181,673
Mortgage-backed securities, residential	199,680		198,366		60,787		61,660
Collateralized mortgage obligations	—		—		335		338
Obligations of states and political subdivisions	43,695		44,426		30,677		31,451
Corporate bonds and notes	747		752		1,502		1,533
SBA loan pools	643		647		1,296		1,304
Trust preferred securities	—		—		1,906		2,028
Corporate stocks	285		463		285		520
Total	$	344,480	$	344,820	$	277,323	$	280,507

Gross unrealized gains and losses on securities available for sale at December 31, 2015 and 2014, were as follows (in thousands):

	2015				2014
	Unrealized Gains		Unrealized Losses		Unrealized Gains		Unrealized Losses
Obligations of U.S. Government and     U.S. Government sponsored enterprises	$	752	$	16	$	1,300	$	162
Mortgage-backed securities, residential	427		1,741		892		19
Collateralized mortgage obligations	—		—		3		—
Obligations of states and political subdivisions	737		6		802		28
Corporate bonds and notes	5		—		35		4
SBA loan pools	5		1		11		3
Trust preferred securities	—		—		122		—
Corporate stocks	178		—		235		—
Total	$	2,104	$	1,764	$	3,400	$	216

The amortized cost and estimated fair value of debt securities available for sale are shown below by expected maturity.  Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.  Securities not due at a single maturity date are shown separately (in thousands):

	December 31, 2015
	Amortized Cost		Fair Value
Within one year	$	49,359	$	49,621
After one, but within five years	68,076		68,847
After five, but within ten years	26,437		26,876
After ten years	—		—
Mortgage-backed securities, residential	199,680		198,366
SBA loan pools	643		647
Total	$	344,195	$	344,357

Actual maturities may differ from contractual maturities above because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

The proceeds from sales and calls of securities resulting in gains or losses are listed below (in thousands):

	2015			2014		2013
Proceeds	$	72,718		$	36,258	$	2,650
Gross gains	$	410		$	6,869	$	16
Gross losses	$	(38	)	$	—	$	—
Tax expense	$	142		$	2,641	$	6

Amortized cost and estimated fair value of securities held to maturity at December 31, 2015 and 2014 are as follows (in thousands):

	2015				2014
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Obligations of states and political subdivisions	$	4,566	$	4,822	$	5,175	$	5,535
Time deposits with other financial institutions	—		—		656		662
	$	4,566	$	4,822	$	5,831	$	6,197

Gross unrealized gains and losses on securities held to maturity at December 31, 2015 and 2014, were as follows (in thousands):

	2015				2014
	Unrealized Gains		Unrealized Losses		Unrealized Gains		Unrealized Losses
Obligations of states and political subdivisions	$	256	$	—	$	360	$	—
Time deposits with other financial institutions	—		—		6		—
Total	$	256	$	—	$	366	$	—

There were no sales of securities held to maturity in 2015 or 2014.

The contractual maturity of securities held to maturity is as follows at December 31, 2015 (in thousands):

	December 31, 2015
	Amortized Cost		Fair Value
Within one year	$	2,266	$	2,290
After one, but within five years	2,103		2,308
After five, but within ten years	197		224
After ten years	—		—
Total	$	4,566	$	4,822

The following table summarizes the investment securities available for sale with unrealized losses at December 31, 2015 and December 31, 2014 by aggregated major security type and length of time in a continuous unrealized position (in thousands):

	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
2015
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	15,169	$	16	$	—	$	—	$	15,169	$	16
Mortgage-backed securities, residential	177,058		1,741		—		—		177,058		1,741
Obligations of states and political subdivisions	3,756		4		592		2		4,348		6
SBA loan pools	—		—		251		1		251		1
Total temporarily impaired securities	$	195,983	$	1,761	$	843	$	3	$	196,826	$	1,764

	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
2014
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	57,512	$	108	$	4,945	$	54	$	62,457	$	162
Mortgage-backed securities, residential	11,051		19		—		—		11,051		19
Obligations of states and political subdivisions	4,625		22		1,056		6		5,681		28
Corporate bonds and notes	—		—		243		4		243		4
Corporate stocks	276		1		316		2		592		3
Total temporarily impaired securities	$	73,464	$	150	$	6,560	$	66	$	80,024	$	216

Other-Than-Temporary-Impairment

As of December 31, 2015, the majority of the Corporation’s unrealized losses in the investment securities portfolio related to mortgage-backed securities. At December 31, 2015, all of the unrealized losses related to mortgage-backed securities were issued by U.S. government sponsored entities, Fannie Mae and Freddie Mac. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Corporation does not have the intent to sell these securities and it is not likely that it will be required to sell these securities before their anticipated recovery, the Corporation does not consider these securities to be other-than-temporarily impaired at December 31, 2015.

During the fourth quarter of 2013, the Corporation sold one CDO consisting of a pool of trust preferred securities that had an amortized cost of $600 thousand.  Total proceeds from the sale of this CDO, was $600 thousand resulting in a slight loss.  The Corporation recognized $29 thousand of additional credit loss in OTTI during 2013. 

The table below presents a roll forward of the cumulative credit losses recognized in earnings for the periods ended December 31, 2015, 2014 and 2013 (in thousands):

	2015		2014			2013
Beginning balance, January 1,	$	—	$	1,939		$	3,506
Additions/Subtractions:
Reductions for previous credit losses realized on securities sold during the year	—		—			(1,596		)
Reductions for previous credit losses realized on securities liquidated during the year	—		(1,939		)	—
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized	—		—			29
Ending balance, December 31,	$	—	$	—		$	1,939

During the first quarter of 2014, the Corporation received notice that one CDO consisting of a pool of trust preferred securities was liquidated and recorded $515 thousand in other operating income during the first quarter of 2014 to reflect proceeds received from the liquidation.  The Corporation does not own any other CDO’s in its investment securities portfolio.

Pledged Securities

The fair value of securities pledged to secure public funds on deposit or for other purposes as required by law was $196.1 million at December 31, 2015 and $190.7 million at December 31, 2014.

The table below shows the securities pledged to secure securities sold under agreements to repurchase at December 31, 2015 and 2014 (in thousands):

	2015				2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Obligations of U.S. Government and U. S.   Government sponsored enterprises	$	22,988	$	23,267	$	36,195	$	36,641
Mortgage-backed securities, residential	20,453		20,589		7,934		8,350
Collateralized mortgage obligations	—		—		48		48
Total	$	43,441	$	43,856	$	44,177	$	45,039

Concentrations

There are no securities of a single issuer (other than securities of U.S. Government sponsored enterprises) that exceed 10% of shareholders' equity at December 31, 2015 or 2014.

Equity Method Investments

The Corporation has an equity investment in Cephas Capital Partners, L.P.  This small business investment company was established for the purpose of providing financing to small businesses in market areas served by the Corporation, including minority-owned small businesses and those that are anticipated to create jobs for the low to moderate income levels in the targeted areas. As of December 31, 2015 and 2014, these investments totaled $0.5 million and $0.7 million, respectively, are included in other assets, and are accounted for under the equity method of accounting.