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Investment Securities
 9 Months Ended
Sep. 30, 2016
Investment Securities [Abstract]  
Investment Securities



NOTE 2:  INVESTMENT SECURITIES



A summary of the amortized cost and fair values of investment securities at September 30, 2016 and December 31, 2015 follows:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Amortized

 

Gross Unrealized

 

Fair

(Dollars in thousands)

Cost

 

Gains

 

Losses

 

Value

At September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$

 10,474 

 

$

 415 

 

$

 (2)

 

$

 10,887 

Total

$

 10,474 

 

$

 415 

 

$

 (2)

 

$

 10,887 



 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$

 65,946 

 

$

 915 

 

$

 (155)

 

$

 66,706 

Obligations of state and political subdivisions

 

 46,404 

 

 

 1,280 

 

 

 (39)

 

 

 47,645 

Residential mortgage-backed securities

 

 272,858 

 

 

 1,216 

 

 

 (614)

 

 

 273,460 

Asset-backed securities

 

 9,605 

 

 

 -

 

 

 (181)

 

 

 9,424 

Corporate debt

 

 20,017 

 

 

 277 

 

 

 (65)

 

 

 20,229 

Total

$

 414,830 

 

$

 3,688 

 

$

 (1,054)

 

$

 417,464 



 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$

 11,797 

 

$

 488 

 

$

 (3)

 

$

 12,282 

Total

$

 11,797 

 

$

 488 

 

$

 (3)

 

$

 12,282 



 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$

 78,363 

 

$

 220 

 

$

 (373)

 

$

 78,210 

Obligations of state and political subdivisions

 

 47,079 

 

 

 620 

 

 

 (134)

 

 

 47,565 

Residential mortgage-backed securities

 

 240,804 

 

 

 936 

 

 

 (1,852)

 

 

 239,888 

Asset-backed securities

 

 9,639 

 

 

 -

 

 

 (224)

 

 

 9,415 

Corporate debt

 

 25,251 

 

 

 148 

 

 

 (146)

 

 

 25,253 

Total

$

 401,136 

 

$

 1,924 

 

$

 (2,729)

 

$

 400,331 



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 $14.2 million and $10.4 million at September 30, 2016 and  December 31, 2015, respectively. 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 September 30, 2016 follows: 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Available for Sale

 

Held to Maturity



Amortized

 

Fair

 

Amortized

 

Fair

(Dollars in thousands)

Cost

 

Value

 

Cost

 

Value

One year or less

$

 6,729 

 

$

 6,791 

 

$

 -

 

$

 -

More than one year through five years

 

 326,597 

 

 

 328,761 

 

 

 9,323 

 

 

 9,691 

More than five years through ten years

 

 44,889 

 

 

 45,143 

 

 

 1,151 

 

 

 1,196 

More than ten years

 

 36,615 

 

 

 36,769 

 

 

 -

 

 

 -

Total

$

 414,830 

 

$

 417,464 

 

$

 10,474 

 

$

 10,887 



The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to be prepaid and are based on expected maturities. Expected maturities differ from contractual maturities because borrowers of the underlying mortgages may have the right to call or prepay obligations with or without prepayment penalties. 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. The table below shows the proceeds, gross realized gains and gross realized losses recognized on the investment portfolio for the three and nine months ended September 30, 2016 and September 30, 2015. The sales during the three and nine months ended September 30, 2016 resulted from a slight restructuring of our investment portfolio and the sales during the three and nine months ended September 30, 2015 resulted from residual payments related to the sale of a private equity investment during the fourth quarter of 2014.







 

 

 

 

 

 

 

 

 

 

 



 

For the three months

 

 

For the nine months



 

ended September 30,

 

 

ended September 30,

(Dollars in thousands)

 

2016

 

 

2015

 

 

2016

 

 

2015

Proceeds from sales

$

 2,063 

 

$

 19 

 

$

 43,593 

 

$

 162 

Gross realized gains

 

 3 

 

 

 19 

 

 

 348 

 

 

 162 

Gross realized losses

 

 -

 

 

 -

 

 

 (54)

 

 

 -



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 September 30, 2016 and December 31, 2015. 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 September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

 4 

 

$

 413 

 

$

 (2)

 

$

 -

 

$

 411 



 4 

 

$

 413 

 

$

 (2)

 

$

 -

 

$

 411 



 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

 7 

 

$

 16,551 

 

$

 (112)

 

$

 (43)

 

$

 16,396 

Obligations of state and political subdivisions

 3 

 

 

 3,043 

 

 

 (2)

 

 

 (37)

 

 

 3,004 

Residential mortgage-backed securities

 52 

 

 

 124,328 

 

 

 (378)

 

 

 (236)

 

 

 123,714 

Asset-backed securities

 3 

 

 

 9,605 

 

 

 -

 

 

 (181)

 

 

 9,424 

Corporate debt

 2 

 

 

 5,005 

 

 

 -

 

 

 (65)

 

 

 4,940 

Total

 67 

 

$

 158,532 

 

$

 (492)

 

$

 (562)

 

$

 157,478 



 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

 1 

 

$

 1,677 

 

$

 -

 

$

 (3)

 

$

 1,674 



 1 

 

$

 1,677 

 

$

 -

 

$

 (3)

 

$

 1,674 



 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

 14 

 

$

 42,438 

 

$

 (138)

 

$

 (235)

 

$

 42,065 

Obligations of state and political subdivisions

 14 

 

 

 11,765 

 

 

 (57)

 

 

 (77)

 

 

 11,631 

Residential mortgage-backed securities

 87 

 

 

 175,043 

 

 

 (1,247)

 

 

 (605)

 

 

 173,191 

Asset-backed securities

 3 

 

 

 9,639 

 

 

 (115)

 

 

 (109)

 

 

 9,415 

Corporate debt

 6 

 

 

 14,987 

 

 

 (75)

 

 

 (71)

 

 

 14,841 

Total

 124 

 

$

 253,872 

 

$

 (1,632)

 

$

 (1,097)

 

$

 251,143 



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 September 30, 2016, 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 September 30, 2016, 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 $194.2 million and $174.0 million were pledged to meet such requirements at September 30, 2016 and December 31, 2015, respectively. Any amount over-pledged can be released at any time.