Note 4 - Debt and Equity Securities

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

4. Debt and Equity Securities

The Company’s investments in equity securities that have readily determinable fair values and all investments in debt securities are classified in one of the following three categories and accounted for accordingly: (1) trading securities, (2) securities available for sale and (3) securities held-to-maturity.

The Company did not hold any trading securities at June 30, 2016 and December 31, 2015. Securities available for sale are recorded at fair value. Securities held-to-maturity are recorded at amortized cost.

The following table summarizes the Company’s portfolio of securities held-to-maturity at June 30, 2016:

	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
	(In thousands)
Securities held-to-maturity:
Municipals	$	28,410	$	28,410	$	-	$	-
Total	$	28,410	$	28,410	$	-	$	-

The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2015:

	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
	(In thousands)
Securities held-to-maturity:
Municipals	$	6,180	$	6,180	$	-	$	-
Total	$	6,180	$	6,180	$	-	$	-

The following table summarizes the Company’s portfolio of securities available for sale at June 30, 2016:

	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
	(In thousands)
Corporate	$	110,000	$	106,263	$	981	$	4,718
Municipals		126,347		131,716		5,369		-
Mutual funds		21,645		21,645		-		-
Collateralized loan obligations		101,650		101,820		340		170
Other		7,169		7,167		-		2
Total other securities		366,811		368,611		6,690		4,890
REMIC and CMO		412,117		420,227		8,562		452
GNMA		7,952		8,120		168		-
FNMA		132,981		136,393		3,449		37
FHLMC		15,453		15,760		307		-
Total mortgage-backed securities		568,503		580,500		12,486		489
Total securities available for sale	$	935,314	$	949,111	$	19,176	$	5,379

Mortgage-backed securities shown in the table above include one private issue collateralized mortgage obligation (“CMO”) that is collateralized by commercial real estate mortgages with amortized cost and market value of $5.3 million at June 30, 2016.

The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2015:

	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
	(In thousands)
Corporate	$	115,976	$	111,674	$	134	$	4,436
Municipals		127,696		131,583		3,887		-
Mutual funds		21,290		21,290		-		-
Collateralized loan obligations		53,225		52,898		-		327
Other		7,214		7,212		-		2
Total other securities		325,401		324,657		4,021		4,765
REMIC and CMO		469,987		469,936		3,096		3,147
GNMA		11,635		11,798		302		139
FNMA		170,327		170,057		1,492		1,762
FHLMC		16,961		16,949		87		99
Total mortgage-backed securities		668,910		668,740		4,977		5,147
Total securities available for sale	$	994,311	$	993,397	$	8,998	$	9,912

Mortgage-backed securities shown in the table above include one private issue CMO that is collateralized by commercial real estate mortgages with an amortized cost and market value of $7.7 million at December 31, 2015.

The following table details the amortized cost and fair value of the Company’s securities classified as held-to-maturity at June 30, 2016, by contractual maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	6,370	$	6,370
Due after one year through five years		40		40
Due after ten years		22,000		22,000
Total securities held-to-maturity	$	28,410	$	28,410

The amortized cost and fair value of the Company’s securities, classified as available for sale at June 30, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	-	$	-
Due after one year through five years		1,810		1,843
Due after five years through ten years		91,683		91,795
Due after ten years		251,673		253,328
Total other securities		345,166		346,966
Mutual funds		21,645		21,645
Mortgage-backed securities		568,503		580,500
Total securities available for sale	$	935,314	$	949,111

The following table shows the Company’s available for sale securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2016:

			Total				Less than 12 months				12 months or more
	Count		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
			(Dollars in thousands)
Corporate		12	$	85,282	$	4,718	$	52,559	$	2,441	$	32,723	$	2,277
Collateralized loan obligations		6		45,861		170		45,861		170		-		-
Other		1		298		2		-		-		298		2
Total other securities		19		131,441		4,890		98,420		2,611		33,021		2,279
REMIC and CMO		8		45,906		452		11,004		61		34,902		391
FNMA		1		7,084		37		-		-		7,084		37
Total mortgage-backed securities		9		52,990		489		11,004		61		41,986		428
Total securities available for sale		28	$	184,431	$	5,379	$	109,424	$	2,672	$	75,007	$	2,707

The following table shows the Company’s available for sale securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2015:

			Total				Less than 12 months				12 months or more
	Count		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
			(Dollars in thousands)
Corporate		12	$	85,563	$	4,436	$	76,218	$	3,782	$	9,345	$	654
Collateralized loan obligations		7		52,898		327		52,898		327		-		-
Other		1		298		2		-		-		298		2
Total other securities		20		138,759		4,765		129,116		4,109		9,643		656
REMIC and CMO		33		238,132		3,147		182,010		1,642		56,122		1,505
GNMA		1		6,977		139		6,977		139		-		-
FNMA		20		102,225		1,762		75,769		1,043		26,456		719
FHLMC		3		14,715		99		14,715		99		-		-
Total mortgage-backed securities		57		362,049		5,147		279,471		2,923		82,578		2,224
Total securities available for sale		77	$	500,808	$	9,912	$	408,587	$	7,032	$	92,221	$	2,880

OTTI losses on impaired securities must be fully recognized in earnings if an investor has the intent to sell the debt security or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost. However, even if an investor does not expect to sell a debt security, the investor must evaluate the expected cash flows to be received and determine if a credit loss has occurred. In the event that a credit loss has occurred, only the amount of impairment associated with the credit loss is recognized in earnings in the Consolidated Statements of Income. Amounts relating to factors other than credit losses are recorded in accumulated other comprehensive income (“AOCI”) within Stockholders’ Equity.

The Company reviewed each investment that had an unrealized loss at June 30, 2016 and December 31, 2015. An unrealized loss exists when the current fair value of an investment is less than its amortized cost basis. Unrealized losses on available for sale securities, that are deemed to be temporary, are recorded in AOCI, net of tax.

The unrealized losses in total securities available for sale at June 30, 2016 and December 31, 2015 were caused by movements in interest rates. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. Therefore, the Company did not consider these investments to be other-than-temporarily impaired at June 30, 2016 and December 31, 2015.

The Company sold available for sale securities with book values at the time of sale totaling $64.6 million and $25.0 million during the three and six months ended June 30, 2016 and 2015, respectively.

The following table represents the gross gains and gross losses realized from the sale of securities available for sale for the periods indicated:

	For the three months ended June 30,						For the six months ended June 30,
	2016			2015			2016			2015
	(In thousands)
Gross gains from the sale of securities	$	2,370		$	233		$	2,370		$	233
Gross losses from the sale of securities		(7	)		(169	)		(7	)		(169	)
Net gains from the sale of securities	$	2,363		$	64		$	2,363		$	64