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Securities
 12 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities

Amortized costs and fair values of securities being held to maturity as of December 31, 2016 and 2015, are summarized as follows:
 
December 31, 2016
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Held to Maturity
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
6,433

 
$
—

 
$
(594
)
 
$
5,839

Corporate securities
4,250

 
21

 
(15
)
 
4,256

Total
$
10,683

 
$
21

 
$
(609
)
 
$
10,095


 
December 31, 2015
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Held to Maturity
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
1,457

 
$
—

 
$
(38
)
 
$
1,419

Corporate securities
2,750

 
24

 
(30
)
 
2,744

Total
$
4,207

 
$
24

 
$
(68
)
 
$
4,163


The amortized cost and fair value of securities being held to maturity as of December 31, 2016, by contractual maturity are shown below. 
 
December 31, 2016
(Dollars in thousands)
Amortized Cost
 
Fair Value
Held to Maturity
 
 
 
Due after five years through ten years
$
4,250

 
$
4,256

Due after ten years
6,433

 
5,839

Total
$
10,683

 
$
10,095



Amortized costs and fair values of securities available for sale as of December 31, 2016 and 2015, are summarized as follows:
 
December 31, 2016
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available for Sale
 
 
 
 
 
 
 
U.S. government agencies
$
73,546

 
$
209

 
$
(571
)
 
$
73,184

Obligations of states and political subdivisions
62,896

 
1,019

 
(542
)
 
63,373

Mortgage-backed securities:
 
 
 
 
 
 
 
Agency
98,549

 
646

 
(1,144
)
 
98,051

Non-agency
9,991

 
16

 
(74
)
 
9,933

Other asset backed securities
41,860

 
361

 
(616
)
 
41,605

Corporate securities
16,648

 
—

 
(1,227
)
 
15,421

Total
$
303,490

 
$
2,251

 
$
(4,174
)
 
$
301,567


 
December 31, 2015
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available for Sale
 
 
 
 
 
 
 
U.S. government agencies
$
79,005

 
$
315

 
$
(380
)
 
$
78,940

Obligations of states and political subdivisions
74,071

 
1,956

 
(434
)
 
75,593

Mortgage-backed securities:
 
 
 
 
 
 
 

Agency
129,360

 
3,046

 
(745
)
 
131,661

Non-agency
12,782

 
33

 
(38
)
 
12,777

Other asset backed securities
58,958

 
426

 
(603
)
 
58,781

Corporate securities
17,557

 
22

 
(760
)
 
16,819

Total
$
371,733

 
$
5,798

 
$
(2,960
)
 
$
374,571



The amortized cost and fair value of securities available for sale as of December 31, 2016, 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.
 
December 31, 2016
(Dollars in thousands)
Amortized Cost
 
Fair Value
Available for Sale
 
 
 
Due in one year or less
$
777

 
$
777

Due after one year through five years
9,020

 
9,219

Due after five years through ten years
25,004

 
24,174

Due after ten years
118,289

 
117,808

Mortgage-backed securities
108,540

 
107,984

Other asset backed securities
41,860

 
41,605

Total
$
303,490

 
$
301,567



Proceeds from sales of securities available for sale during 2016, 2015, and 2014 were $79.3 million, $11.6 million, and $58.9 million, respectively.  Proceeds from calls and principal repayments of securities available for sale during 2016, 2015, and 2014 were $76.2 million, $89.9 million and $73.4 million, respectively. Gross gains on sales and calls of securities available for sale were $1.5 million, and $49,000 in 2016, respectively, $172,000 and $5,000 in 2015, respectively and $770,000 and none in 2014, respectively. Gross losses on sales and calls of securities available for sale were $28,000, and $9,000 in 2016, respectively, $37,000 and none in 2015, respectively and $584,000 and none in 2014 respectively. There were no losses recognized for impaired securities in 2016, 2015, and 2014. The tax expense applicable to these net realized gains amounted to $528,000, $48,000, and $63,000, for 2016, 2015 and 2014, respectively.

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 $115.7 million and $113.1 million at December 31, 2016 and 2015, respectively.

At December 31, 2016 and 2015, 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
2016
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
 
Fair Value
 
Gross
Unrealized Losses
Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
 
$
5,839

 
$
(594
)
 
$
—

 
$
—

 
$
5,839

 
$
(594
)
Corporate securities
 
1,485

 
(15
)
 
—

 
—

 
1,485

 
(15
)
Total
 
$
7,324

 
$
(609
)
 
$
—

 
$
—

 
$
7,324

 
$
(609
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agencies
 
$
46,700

 
$
(495
)
 
$
7,174

 
$
(76
)
 
$
53,874

 
$
(571
)
Obligations of states and political subdivisions
 
12,670

 
(257
)
 
6,968

 
(285
)
 
19,638

 
(542
)
Mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Agency
 
51,018

 
(634
)
 
13,020

 
(510
)
 
64,038

 
(1,144
)
Non-agency
 
5,379

 
(68
)
 
1,944

 
(6
)
 
7,323

 
(74
)
Other asset backed securities
 
7,007

 
(284
)
 
16,388

 
(332
)
 
23,395

 
(616
)
Corporate securities
 
5,912

 
(241
)
 
9,262

 
(986
)
 
15,174

 
(1,227
)
Total
 
$
128,686

 
$
(1,979
)
 
$
54,756

 
$
(2,195
)
 
$
183,442

 
$
(4,174
)


(Dollars in thousands)
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
2015
 
Fair Value
 
Gross Unrealized Losses
 
Fair Value
 
Gross Unrealized Losses
 
Fair Value
 
Gross Unrealized Losses
Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
 
$
1,419

 
$
(38
)
 
$
—

 
$
—

 
$
1,419

 
$
(38
)
Corporate securities
 
1,970

 
(30
)
 
—

 
—

 
1,970

 
(30
)
Total
 
$
3,389

 
$
(68
)
 
$
—

 
$
—

 
$
3,389

 
$
(68
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agencies
 
$
46,000

 
$
(304
)
 
$
4,223

 
$
(76
)
 
$
50,223

 
$
(380
)
Obligations of states and political subdivisions
 
16,559

 
(324
)
 
1,082

 
(110
)
 
17,641

 
(434
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Agency
 
27,627

 
(402
)
 
9,911

 
(343
)
 
37,538

 
(745
)
Non-agency
 
7,842

 
(37
)
 
671

 
(1
)
 
8,513

 
(38
)
Other asset backed securities
 
25,399

 
(276
)
 
12,037

 
(327
)
 
37,436

 
(603
)
Corporate securities
 
10,740

 
(378
)
 
4,866

 
(382
)
 
15,606

 
(760
)
Total
 
$
134,167

 
$
(1,721
)
 
$
32,790

 
$
(1,239
)
 
$
166,957

 
$
(2,960
)


A total of 256 securities have been identified by the Company as temporarily impaired at December 31, 2016.  Of the 256 securities, 251 are investment grade and five are speculative grade.  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 December 31, 2016.  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 income statement and balance sheet.

Other-than-temporary impairment losses
At December 31, 2016, 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 in an unrealized loss position 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, the Company does not consider any portfolio securities to be other-than-temporarily impaired. 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 December 31, 2016.  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 years ended December 31, 2016, 2015, and 2014, no credit related impairment losses were recognized by the Company.

Restricted securities
The Company’s investment in FHLB stock totaled $2.8 million and $4.7 million at December 31, 2016 and 2015, respectively.  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 December 31, 2016, 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.

The Company also had an investment in FRB stock which totaled $1.7 million at December 31, 2016 and 2015, respectively. The investment in FRB stock is a required investment and is carried at cost since there is no ready market. The Company does not consider this investment to be other-than-temporarily impaired at December 31, 2016 and no impairment has been recognized. FRB stock is shown in the restricted securities line item on the consolidated balance sheets and is not part of the available for sale securities portfolio.