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Securities
 3 Months Ended
Mar. 31, 2014
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities

Amortized costs and fair values of securities available for sale are summarized as follows:
 
March 31, 2014
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available for Sale
 
 
 
 
 
 
 
U.S. government agencies
$
22,378

 
$
179

 
$
(282
)
 
$
22,275

Obligations of states and political subdivisions
65,389

 
1,507

 
(1,580
)
 
65,316

Mortgage-backed securities:
 
 
 
 
 
 
 
Agency
169,425

 
3,970

 
(1,251
)
 
172,144

Non-agency
23,012

 
151

 
(126
)
 
23,037

Other asset backed securities
27,007

 
540

 
(82
)
 
27,465

Corporate preferred stock
68

 
10

 
—

 
78

Corporate securities
15,414

 
50

 
(259
)
 
15,205

Total
$
322,693

 
$
6,407

 
$
(3,580
)
 
$
325,520


 
December 31, 2013
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available for Sale
 
 
 
 
 
 
 
U.S. government agencies
$
21,367

 
$
304

 
$
(332
)
 
$
21,339

Obligations of states and political subdivisions
68,904

 
1,083

 
(2,749
)
 
67,238

Mortgage-backed securities:
 
 
 
 
 
 
 

Agency
166,095

 
3,539

 
(1,624
)
 
168,010

Non-agency
22,029

 
116

 
(211
)
 
21,934

Other asset backed securities
33,883

 
710

 
(175
)
 
34,418

Corporate preferred stock
69

 
5

 
—

 
74

Corporate securities
15,680

 
58

 
(328
)
 
15,410

Total
$
328,027

 
$
5,815

 
$
(5,419
)
 
$
328,423



The amortized cost and fair value of securities available for sale as of March 31, 2014, by contractual maturity are shown below.  Maturities may differ from contractual maturities in corporate and mortgage-backed securities because the securities and mortgages underlying the securities may be called or repaid without any penalties.  Therefore, these securities are not included in the maturity categories in the following maturity summary.
 
March 31, 2014
(Dollars in thousands)
Amortized
Cost
 
Fair
Value
Due in one year or less
$
5,400

 
$
5,498

Due after one year through five years
29,278

 
30,030

Due after five years through ten years
41,011

 
40,709

Due after ten years
27,492

 
26,559

Mortgage-backed securities
192,437

 
195,181

Other asset backed securities
27,007

 
27,465

Corporate preferred stock
68

 
78

Total
$
322,693

 
$
325,520



Proceeds from sales of securities during the three months ended March 31, 2014, were $26.0 million.  Gross gains of $323,000 and gross losses of $260,000 were realized on those sales, respectively.  The tax expense applicable to these net realized gains amounted to $21,000.

The carrying value of securities pledged to qualify for fiduciary powers, to secure public monies and for other purposes as required by law amounted to $112.8 million at March 31, 2014.

Investments in an unrealized loss position that are temporarily impaired are as follows:
(Dollars in thousands)
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
March 31, 2014
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
U.S. government agencies
 
$
9,793

 
$
(217
)
 
$
1,396

 
$
(65
)
 
$
11,189

 
$
(282
)
Obligations of states and political subdivisions
 
11,822

 
(766
)
 
5,434

 
(814
)
 
17,256

 
(1,580
)
Mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Agency
 
38,442

 
(814
)
 
12,590

 
(437
)
 
51,032

 
(1,251
)
Non-agency
 
8,775

 
(89
)
 
1,371

 
(37
)
 
10,146

 
(126
)
Other asset backed securities
 
4,956

 
(56
)
 
1,082

 
(26
)
 
6,038

 
(82
)
Corporate preferred stock
 
—

 
—

 
—

 
—

 
—

 
—

Corporate securities
 
7,005

 
(249
)
 
490

 
(10
)
 
7,495

 
(259
)
Total
 
$
80,793

 
$
(2,191
)
 
$
22,363

 
$
(1,389
)
 
$
103,156

 
$
(3,580
)


(Dollars in thousands)
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
December 31, 2013
 
Fair Value
 
Gross Unrealized Losses
 
Fair Value
 
Gross Unrealized Losses
 
Fair Value
 
Gross Unrealized Losses
U.S. government agencies
 
$
10,218

 
$
(273
)
 
$
1,416

 
$
(59
)
 
$
11,634

 
$
(332
)
Obligations of states and political subdivisions
 
24,568

 
(2,539
)
 
1,798

 
(210
)
 
26,366

 
(2,749
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Agency
 
50,048

 
(1,264
)
 
8,228

 
(360
)
 
58,276

 
(1,624
)
Non-agency
 
14,505

 
(152
)
 
1,351

 
(59
)
 
15,856

 
(211
)
Other asset backed securities
 
1,585

 
(39
)
 
2,187

 
(136
)
 
3,772

 
(175
)
Corporate preferred stock
 
—

 
—

 
—

 
—

 
—

 
—

Corporate securities
 
6,247

 
(274
)
 
4,446

 
(54
)
 
10,693

 
(328
)
Total
 
$
107,171

 
$
(4,541
)
 
$
19,426

 
$
(878
)
 
$
126,597

 
$
(5,419
)


A total of 110 securities have been identified by the Company as temporarily impaired at March 31, 2014.  Of the 110 securities, 109 are investment grade and one is speculative grade.  Mortgage-backed securities and municipal securities make up the majority of temporarily impaired securities at March 31, 2014.  Market prices change daily and are affected by conditions beyond the control of the Company.  Although the Company has the ability to hold these securities until the temporary loss is recovered, decisions by management may necessitate a sale before the loss is fully recovered.  No such sales were anticipated or required as of March 31, 2014.  Investment decisions reflect the strategic asset/liability objectives of the Company.  The investment portfolio is analyzed frequently by the Company and managed to provide an overall positive impact to the Company’s consolidated income statement and balance sheet.

Trust preferred securities

As of March 31, 2014 and December 31, 2013 the Company held no trust preferred securities in its investment portfolio.

Other-than-temporary impairment losses

At March 31, 2014, the Company evaluated the investment portfolio for possible other-than-temporary impairment losses and concluded that no adverse change in cash flows occurred and did not consider any portfolio securities to be other-than-temporarily impaired.  Based on this analysis and because the Company does not intend to sell securities prior to maturity and it is more likely than not the Company will not be required to sell any securities before recovery of amortized cost basis, which may be at maturity. For debt securities related to corporate securities, the Company determined that there was no other adverse change in the cash flows as viewed by a market participant; therefore, the Company does not consider the investments in these assets to be other-than-temporarily impaired at March 31, 2014.  However, there is a risk that the Company’s continuing reviews could result in recognition of other-than-temporary impairment charges in the future. For the three months ended March 31, 2014 and the year ended December 31, 2013, no credit related impairment losses were recognized by the Company.

The Company’s investment in FHLB stock totaled $4.7 million at March 31, 2014.  FHLB stock is generally viewed as a long-term investment and as a restricted security which is carried at cost because there is no market for the stock other than the FHLB or member institutions.  Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value.  The Company does not consider this investment to be other-than-temporarily impaired at March 31, 2014, and no impairment has been recognized.  FHLB stock is shown in restricted securities on the consolidated balance sheets and is not part of the available for sale portfolio.