Securities |
NOTE 2—SECURITIES
The amortized cost and fair value of available for sale securities
and the related gross unrealized gains and losses recognized in
accumulated other comprehensive loss were as follows.
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Amortized
Cost |
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Gross
Unrealized
Gains |
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Gross
Unrealized
Losses |
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Fair Value |
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2014
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U.S. Treasury securities and obligations of U.S. government
agencies
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$ |
42,910 |
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$ |
115 |
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$ |
(123 |
) |
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$ |
42,902 |
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Obligations of states and political subdivisions
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|
83,215 |
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5,112 |
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(306 |
) |
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88,021 |
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Mortgage-back securities in government sponsored entities
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65,646 |
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976 |
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(180 |
) |
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66,442 |
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Total debt securities
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191,771 |
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6,203 |
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(609 |
) |
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197,365 |
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Equity securities in financial institutions
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|
481 |
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59 |
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— |
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|
540 |
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Total
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$ |
192,252 |
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$ |
6,262 |
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$ |
(609 |
) |
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$ |
197,905 |
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Amortized
Cost |
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Gross
Unrealized
Gains |
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Gross
Unrealized
Losses |
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Fair Value |
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2013
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U.S. Treasury securities and obligations of U.S. government
agencies
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$ |
52,229 |
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$ |
95 |
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|
$ |
(764 |
) |
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$ |
51,560 |
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Obligations of states and political subdivisions
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|
79,975 |
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|
2,327 |
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(1,677 |
) |
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|
80,625 |
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Mortgage-back securities in government sponsored entities
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66,409 |
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1,127 |
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(557 |
) |
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66,979 |
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Total debt securities
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198,613 |
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3,549 |
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(2,998 |
) |
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|
199,164 |
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Equity securities in financial institutions
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|
481 |
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— |
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(32 |
) |
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449 |
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Total
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$ |
199,094 |
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$ |
3,549 |
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$ |
(3,030 |
) |
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$ |
199,613 |
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The amortized cost and fair value of securities at year end 2014 by
contractual maturity were as follows. Securities not due at a
single maturity date, primarily mortgage-backed securities, are
shown separately.
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Available for sale |
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Amortized
Cost |
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Fair Value |
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Due in one year or less
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$ |
628 |
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$ |
629 |
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Due from one to five years
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27,702 |
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27,723 |
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Due from five to ten years
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34,718 |
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36,191 |
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Due after ten years
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63,077 |
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|
66,380 |
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Mortgage-backed securities in government sponsored entities
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65,646 |
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|
66,442 |
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Equity securities in financial institutions
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|
481 |
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|
540 |
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Total
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$ |
192,252 |
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$ |
197,905 |
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Securities with a carrying value of $137,898 and $147,625 were
pledged as of December 31, 2014 and 2013, respectively, to
secure public deposits, other deposits and liabilities as required
or permitted by law.
Proceeds from sales of securities, gross realized gains and gross
realized losses were as follows.
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2014 |
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2013 |
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Sale proceeds
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$ |
18,088 |
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$ |
8,686 |
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Gross realized gains
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|
113 |
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|
144 |
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Gross realized losses
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(1 |
) |
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(89 |
) |
Gains from securities called or settled by the issuer
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1 |
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|
149 |
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Debt securities with unrealized losses at year end 2014 and 2013
not recognized in income are as follows.
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2014
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12 Months or less
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More than 12 months
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Total
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Description of Securities
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Fair
Value |
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Unrealized
Loss |
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Fair
Value |
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Unrealized
Loss |
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Fair
Value |
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Unrealized
Loss |
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U.S. Treasury securities and obligations of U.S. government
agencies
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$ |
7,664 |
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|
$ |
(17 |
) |
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$ |
11,888 |
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$ |
(106 |
) |
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$ |
19,552 |
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|
$ |
(123 |
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Obligations of states and political subdivisions
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|
853 |
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(11 |
) |
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5,647 |
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(295 |
) |
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6,500 |
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(306 |
) |
Mortgage-backed securities in gov’t sponsored entities
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12,289 |
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(29 |
) |
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11,492 |
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(151 |
) |
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23,781 |
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(180 |
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Total temporarily impaired
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$ |
20,806 |
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$ |
(57 |
) |
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$ |
29,027 |
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$ |
(552 |
) |
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$ |
49,833 |
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$ |
(609 |
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2013
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12 Months or less
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More than 12 months
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Total
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Description of Securities
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Fair
Value |
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Unrealized
Loss |
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Fair
Value |
|
|
Unrealized
Loss |
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Fair
Value |
|
|
Unrealized
Loss |
|
U.S. Treasury securities and obligations of U.S. government
agencies
|
|
$ |
30,800 |
|
|
$ |
(764 |
) |
|
$ |
— |
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|
$ |
— |
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$ |
30,800 |
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|
$ |
(764 |
) |
Obligations of states and political subdivisions
|
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|
28,428 |
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(1,556 |
) |
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|
968 |
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(121 |
) |
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29,396 |
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(1,677 |
) |
Mortgage-backed securities in gov’t sponsored entities
|
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|
32,557 |
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(553 |
) |
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|
279 |
|
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|
(4 |
) |
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32,836 |
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|
(557 |
) |
Equity securities in financial institutions
|
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|
449 |
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|
(32 |
) |
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— |
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— |
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|
449 |
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(32 |
) |
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Total temporarily impaired
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$ |
92,234 |
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$ |
(2,905 |
) |
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$ |
1,247 |
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$ |
(125 |
) |
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$ |
93,481 |
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$ |
(3,030 |
) |
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The Company periodically evaluates securities for
other-than-temporary impairment. An unrealized loss exists when the
current fair value of an individual security is less than its
amortized cost basis. Unrealized losses that are determined to be
temporary in nature are recorded, net of tax, in accumulated other
comprehensive income.
The Company has assessed each available-for-sale security position
for credit impairment. Factors considered in determining whether a
loss is temporary include:
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The length of time and the extent to
which fair value has been below cost; |
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The severity of impairment; |
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The cause of the impairment and the
financial condition and near-term prospects of the issuer; |
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If the Company intends to sell the
investment; |
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If it’s more-likely-than-not
the Company will be required to sell the investment before
recovering its amortized cost basis; and |
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• |
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If the Company does not expect to
recover the investment’s entire amortized cost basis (even if
the Company does not intend to sell the investment). |
The Company’s review for impairment generally entails:
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Identification and evaluation of
investments that have indications of impairment; |
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• |
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Analysis of individual investments
that have fair values less than amortized cost, including
consideration of length of time each investment has been in
unrealized loss position and the expected recovery period; |
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Evaluation of factors or triggers
that could cause individual investments to qualify as having
other-than-temporary impairment; and |
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Documentation of these analyses, as
required by policy. |
At December 31, 2014, the Company owned 41 securities that
were considered temporarily impaired. The unrealized losses on
these securities have not been recognized into income because the
issuers’ bonds are of high credit quality, management has the
intent and ability to hold these securities for the foreseeable
future, and the decline in fair value is largely due to changes in
market interest rates. The Company also considers sector specific
credit rating changes in its analysis. The fair value is expected
to recover as the securities approach their maturity date or reset
date. The Company does not intend to sell until recovery and does
not believe selling will be required before recovery.
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