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Investment Securities
 12 Months Ended
Dec. 31, 2016
Investment Securities [Abstract]  
Investment Securities



Note 4:  Investment Securities



A summary of the amortized cost and fair values of investment securities follows:







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Amortized

 

Gross Unrealized

 

Fair

(Dollars in thousands)

Cost

 

Gains

 

Losses

 

Value

At December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$

 10,443 

 

$

 242 

 

$

 (8)

 

$

 10,677 

Total

$

 10,443 

 

$

 242 

 

$

 (8)

 

$

 10,677 



 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$

 69,691 

 

$

 201 

 

$

 (198)

 

$

 69,694 

Obligations of state and political subdivisions

 

 46,105 

 

 

 461 

 

 

 (191)

 

 

 46,375 

Residential mortgage-backed securities

 

 282,035 

 

 

 573 

 

 

 (1,966)

 

 

 280,642 

Asset-backed securities

 

 9,265 

 

 

 -

 

 

 (88)

 

 

 9,177 

Corporate debt

 

 20,017 

 

 

 385 

 

 

 (72)

 

 

 20,330 

Total

$

 427,113 

 

$

 1,620 

 

$

 (2,515)

 

$

 426,218 



 

 

 

 

 

 

 

 

 

 

 

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. 



Securities with limited marketability, such as FRB stock, FHLB stock, and certain other investments, are carried at cost and included in other assets on our Consolidated Statements of Financial Condition. Total investments carried at cost were $14.6 million and  $10.4 million at December 31, 2016 and 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 December 31, 2016 follows:  





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Available for Sale

 

Held to Maturity



Amortized

 

Fair

 

Amortized

 

Fair

(Dollars in thousands)

Cost

 

Value

 

Cost

 

Value

One year or less

$

 7,702 

 

$

 7,747 

 

$

 -

 

$

 -

More than one year through five years

 

 309,028 

 

 

 308,505 

 

 

 9,298 

 

 

 9,535 

More than five years through ten years

 

 76,505 

 

 

 75,976 

 

 

 1,145 

 

 

 1,142 

More than ten years

 

 33,878 

 

 

 33,990 

 

 

 -

 

 

 -

Total

$

 427,113 

 

$

 426,218 

 

$

 10,443 

 

$

 10,677 

 

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. Sales of securities available for sale are as follows: 





 

 

 

 

 

 

 

 

(Dollars in thousands)

 

2016

 

 

2015

 

 

2014

Proceeds from sales

$

 43,593 

 

$

 162 

 

$

 2,545 

Gross realized gains

 

 348 

 

 

 162 

 

 

 1,120 

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 December 31, 2016 and 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 December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

 7 

 

$

 1,987 

 

$

 (8)

 

$

 -

 

$

 1,979 



 7 

 

$

 1,987 

 

$

 (8)

 

$

 -

 

$

 1,979 



 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

 13 

 

$

 34,734 

 

$

 (111)

 

$

 (87)

 

$

 34,536 

Obligations of state and political subdivisions

 36 

 

 

 18,283 

 

 

 (145)

 

 

 (46)

 

 

 18,092 

Residential mortgage-backed securities

 89 

 

 

 225,986 

 

 

 (1,618)

 

 

 (348)

 

 

 224,020 

Asset-backed securities

 3 

 

 

 9,265 

 

 

 -

 

 

 (88)

 

 

 9,177 

Other Securities

 2 

 

 

 5,005 

 

 

 -

 

 

 (72)

 

 

 4,933 

Total

 143 

 

$

 293,273 

 

$

 (1,874)

 

$

 (641)

 

$

 290,758 



 

 

 

 

 

 

 

 

 

 

 

 

 

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 

Other Securities

 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 the intent and ability of us to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value. 

 

Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time we expect to receive full value for the securities. Furthermore, as of December 31, 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 we will most likely not have to sell any such securities before a recovery of cost. The declines in fair value were attributable to 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 December 31, 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, borrowings from the FHLB, and for other applicable purposes. Securities with an amortized cost of $199.0 million and $174.0 million were pledged to meet such requirements at December 31, 2016 and 2015, respectively. Any amount over-pledged can be released at any time.