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Investment Securities
 6 Months Ended
Jun. 30, 2015
Investment Securities [Abstract]  
Investment Securities

 

NOTE 2:  INVESTMENT SECURITIES

 

A summary of the amortized cost and fair values of investment securities at June 30, 2015 and December 31, 2014 follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized

 

Gross Unrealized

 

Fair

(Dollars in thousands)

Cost

 

Gains

 

Losses

 

Value

At June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$
11,364 

 

$
460 

 

$
(6)

 

$
11,818 

Total

$
11,364 

 

$
460 

 

$
(6)

 

$
11,818 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$
83,508 

 

$
474 

 

$
(269)

 

$
83,713 

Obligations of state and political subdivisions

 
32,546 

 

 
524 

 

 
(123)

 

 
32,947 

Residential mortgage-backed securities

 
202,438 

 

 
1,350 

 

 
(809)

 

 
202,979 

Asset-backed securities

 
9,624 

 

 
10 

 

 
(21)

 

 
9,613 

Other securities

 
32,493 

 

 
258 

 

 
(107)

 

 
32,644 

Total

$
360,609 

 

$
2,616 

 

$
(1,329)

 

$
361,896 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$
12,362 

 

$
528 

 

$
(10)

 

$
12,880 

Total

$
12,362 

 

$
528 

 

$
(10)

 

$
12,880 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$
99,959 

 

$
359 

 

$
(772)

 

$
99,546 

Obligations of state and political subdivisions

 
32,760 

 

 
519 

 

 
(140)

 

 
33,139 

Residential mortgage-backed securities

 
177,391 

 

 
1,686 

 

 
(850)

 

 
178,227 

Asset-backed securities

 
9,608 

 

 

 -

 

 
(60)

 

 
9,548 

Other securities

 
32,557 

 

 
240 

 

 
(26)

 

 
32,771 

Total

$
352,275 

 

$
2,804 

 

$
(1,848)

 

$
353,231 

 

Residential mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association. Other securities consist of corporate stock.

 

Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank (“FHLB”) stock, and certain other investments, are carried at cost and included in other assets on the consolidated statements of financial condition.  Total investments carried at cost were $7.9 million at June 30, 2015 and  December 31, 2014.  There are no identified events or changes in circumstances that may have a significant adverse effect on the investments carried at cost.  

 

A comparison of the amortized cost and approximate fair value of our investment securities by maturity date at June 30, 2015 follows: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale

 

Held to Maturity

 

Amortized

 

Fair

 

Amortized

 

Fair

(Dollars in thousands)

Cost

 

Value

 

Cost

 

Value

One year or less

$
14,014 

 

$
14,114 

 

$

 -

 

$

 -

More than one year through five years

 
229,893 

 

 
230,710 

 

 
8,017 

 

 
8,189 

More than five years through ten years

 
75,395 

 

 
75,457 

 

 
3,347 

 

 
3,629 

More than ten years

 
41,307 

 

 
41,615 

 

 

 -

 

 

 -

Total

$
360,609 

 

$
361,896 

 

$
11,364 

 

$
11,818 

 

The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to prepay.  No other prepayment or repricing assumptions have been applied to our investment securities for this analysis. 

 

Gain or loss on sale of investments is based upon the specific identification method.  There was a  $0.1 million gain on sales of securities for the six months ended June 30, 2015 which resulted from residual payments related to the sale of a private equity investment during the fourth quarter of 2014. There was a $0.8 million gain on sales of securities for the six months ended June 30, 2014, which was the result of the sale of a stock investment that was acquired in a prior year repossession.

 

The following table shows securities with gross unrealized losses and their fair values by the length of time that the individual securities had been in a continuous unrealized loss position at June 30, 2015 and December 31, 2014.  Securities whose market values exceed cost are excluded from this table.     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuous Unrealized

 

 

 

 

 

 

Amortized cost of

 

Loss Existing for:

 

Fair value of

 

Number of

 

securities with

 

Less Than

 

More Than

 

securities with

(Dollars in thousands)

Securities

 

unrealized losses

 

12 Months

 

12 Months

 

unrealized losses

At June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions
1 

 

$
1,698 

 

$
(6)

 

$

 -

 

$
1,692 

 
1 

 

$
1,698 

 

$
(6)

 

$

 -

 

$
1,692 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities
7 

 

$
32,900 

 

$
(47)

 

$
(221)

 

$
32,632 

Obligations of state and political subdivisions
7 

 

 
9,102 

 

 
(43)

 

 
(81)

 

 
8,978 

Residential mortgage-backed securities
46 

 

 
105,680 

 

 
(326)

 

 
(483)

 

 
104,871 

Asset-backed securities
2 

 

 
5,671 

 

 
(21)

 

 

 -

 

 
5,650 

Other securities
4 

 

 
6,978 

 

 
(37)

 

 
(70)

 

 
6,871 

Total
66 

 

$
160,331 

 

$
(474)

 

$
(855)

 

$
159,002 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions
1 

 

$
1,718 

 

$
(10)

 

$

 -

 

$
1,708 

 
1 

 

$
1,718 

 

$
(10)

 

$

 -

 

$
1,708 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities
13 

 

$
60,578 

 

$
(37)

 

$
(735)

 

$
59,806 

Obligations of state and political subdivisions
8 

 

 
10,076 

 

 

 -

 

 
(140)

 

 
9,936 

Residential mortgage-backed securities
40 

 

 
65,223 

 

 
(110)

 

 
(740)

 

 
64,373 

Asset-backed securities
3 

 

 
9,608 

 

 
(19)

 

 
(41)

 

 
9,548 

Other securities
2 

 

 
9,571 

 

 
(3)

 

 
(23)

 

 
9,545 

Total
66 

 

$
155,056 

 

$
(169)

 

$
(1,679)

 

$
153,208 

 

 

We evaluate all securities on an individual basis for other-than-temporary impairment on at least a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value. 

 

We have the ability and intent to hold the securities classified as held to maturity until they mature, at which time we expect to receive full value for the securities.  Furthermore, as of June 30, 2015, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is not likely that we will have to sell any such securities before a recovery of cost.  The declines in fair value were attributable to recent increases in market interest rates over the yields available at the time the underlying securities were purchased or increases in spreads over market interest rates.  Management does not believe any of the securities are impaired due to credit quality.  Accordingly, as of June 30, 2015, management believes the impairment of these investments is not deemed to be other-than-temporary. 

 

As required by law, available for sale investment securities are pledged to secure public and trust deposits, sweep agreements, and borrowings from the FHLB.  Securities with an amortized cost of $212.3 million and $218.5 million were pledged to meet such requirements at June 30, 2015 and December 31, 2014, respectively.  Any amount over-pledged can be released at any time.