3. Investment Securities

The amortized cost and estimated fair value of securities were as follows:

	December 31, 2013
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gain		Loss			Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	73	$	8	$	—		$	81
Municipal bonds	95,388		589		(1,850		)	94,127
Mortgage-backed securities	165,857		12		(3,988		)	161,881
Total securities available for sale	261,318		609		(5,838		)	256,089

FHLB stock	7,483		—		—			7,483
Federal Reserve Bank stock/TIB	7,967		—		—			7,967
Total equities held at cost	15,450		—		—			15,450
Total securities	$	276,768	$	609	$	(5,838	)	$	271,539

	December 31, 2012
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gain		Loss			Fair Value
	(in thousands)
Investment securities available for sale:
U.S. Treasury	$	147	$	12	$	—		$	159
Municipal bonds	25,401		1,186		(1		)	26,586
Mortgage-backed securities	56,641		1,162		(482		)	57,321
Total securities available for sale	82,189		2,360		(483		)	84,066

FHLB stock	9,228		—		—			9,228
Federal Reserve Bank stock	2,019		—		—			2,019
Total equities held at cost	11,247		—		—			11,247
Total securities	$	93,436	$	2,360	$	(483	)	$	95,313

At December 31, 2013, the Company had a $7.5 million investment in FHLB stock carried at cost. During the years ended December 31, 2012 and 2013, the FHLB has repurchased $4.3 million of the Company’s excess FHLB stock through their stock repurchase program.

At December 31, 2013, mortgage-backed securities (“MBS”) with an estimated par value of $34.0 million and a fair value of $34.9 million were pledged as collateral for the Bank’s three inverse putable reverse repurchases totaling $28.5 million.

The Company reviewed individual securities classified as available-for-sale to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. If it is probable that the Company will be unable to collect all amounts due according to contractual terms of the debt security not impaired at acquisition, an OTTI shall be considered to have occurred. If an OTTI occurs, the cost basis of the security will be written down to its fair value as the new cost basis and the write down accounted for as a realized loss. There were no securities with OTTI at December 31, 2013. The Company realized OTTI losses of $4,000 in 2013, $159,000 in 2012 and $617,000 in 2011.

The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position.

	December 31, 2013
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)

Municipal bonds	133	$	61,524	$	(1,850	)	—	$	—	$	—		133	$	61,524	$	(1,850	)
Mortgage-backed securities	45	140,704		(3,075		)	1	12,607		(913		)	46	153,311		(3,988		)
Total	178	$	202,228	$	(4,925	)	1	$	12,607	$	(913	)	179	$	214,835	$	(5,838	)

	December 31, 2012
	Less than 12 months						12 months or Longer						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
		Fair		Holding				Fair		Holding				Fair		Holding
	Number	Value		Losses			Number	Value		Losses			Number	Value		Losses
	(dollars in thousands)

Municipal bonds	1	$	292	$	(1	)	—	$	—	$	—		1	$	292	$	(1	)
Mortgage-backed securities	2	15,128		(152		)	31	1,012		(330		)	33	16,140		(482		)
Total	3	$	15,420	$	(153	)	31	$	1,012	$	(330	)	34	$	16,432	$	(483	)

The amortized cost and estimated fair value of investment securities available for sale at December 31, 2013, by contractual maturity are shown in the table below.

	At December 31, 2013
	One Year				More than One				More than Five Years				More than
	or Less				Year to Five Years				to Ten Years				Ten Years				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value
	(dollars in thousands)
Investment securities available for sale:
U.S. Treasury	$	—	$	—	$	73	$	81	$	—	$	—	$	—	$	—	$	73	$	81
Municipal bonds	—		—		9,940		9,909		43,685		43,173		41,763		41,045		95,388		94,127
Mortgage-backed securities	—		—		—		—		13,390		13,235		152,467		148,646		165,857		161,881
Total investment securities available for sale	—		—		10,013		9,990		57,075		56,408		194,230		189,691		261,318		256,089

Stock:
FHLB	7,483		7,483		—		—		—		—		—		—		7,483		7,483
Federal Reserve Bank/TIB	7,967		7,967		—		—		—		—		—		—		7,967		7,967
Total stock	15,450		15,450		—		—		—		—		—		—		15,450		15,450
Total securities	$	15,450	$	15,450	$	10,013	$	9,990	$	57,075	$	56,408	$	194,230	$	189,691	$	276,768	$	271,539

The temporary impairment in both years is a result of the change in market interest rates and not the underlying issuers’ ability to repay. The Company has the intent and ability to hold these securities until the temporary impairment is eliminated. Accordingly, the Company has not recognized the temporary impairment in earnings of either year.

Unrealized gains and losses on investment securities available for sale are recognized in stockholders’ equity as accumulated other comprehensive income (loss). At December 31, 2013, the Company had accumulated other comprehensive (loss) of $5.2 million, or $3.1 million net of tax, compared to accumulated other comprehensive income of $1.9 million or $1.1 million net of tax, at December 31, 2012.