Investment Securities (Tables)

9 Months Ended

Sep. 30, 2018

Amortized Cost and Fair Values of Securities

The amortized costs and approximate fair values, together with gross unrealized gains and losses on securities, are in the tables below. All mortgage-backed securities and collateralized mortgage obligations held as of September 30, 2018 and December 31, 2017 were guaranteed by government sponsored entities, government corporations or federal agencies.



	September 30, 2018
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for Sale Securities
Mortgage-backed securities	$	101,729		63		(3,208)	$	98,584
Collateralized mortgage obligations		112,945		11		(3,674)		109,282
Municipal obligations		148,141		861		(2,775)		146,227
Corporate obligations		7,498		33		(877)		6,654
Total investment securities	$	370,313	$	968	$	(10,534)	$	360,747



	December 31, 2017
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for Sale Securities
Mortgage-backed securities	$	68,335	$	225	$	(762)	$	67,798
Collateralized mortgage obligations		88,488		58		(1,296)		87,250
Municipal obligations		107,060		3,709		(274)		110,495
Corporate obligations		12,966		69		(1,200)		11,835
Total investment securities	$	276,849	$	4,061	$	(3,532)	$	277,378

Amortized Cost and Fair Value of Available for Sale Securities by Contractual Maturity



	Available for Sale
Description of Securities	Amortized Cost		Fair Value
Security obligations due
Within one year	$	501	$	505
One to five years		4,890		4,924
Five to ten years		24,392		24,632
After ten years		125,856		122,820
		155,639		152,881
Mortgage-backed securities		101,729		98,584
Collateralized mortgage obligations		112,945		109,282
Totals	$	370,313	$	360,747

Investments Gross Unrealized Losses and Fair Value in Continuous Unrealized Loss Position

The following tables show the gross unrealized losses and fair value of the Company’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017:



	September 30, 2018
	Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale Securities
Mortgage-backed securities	$	55,688	$	(1,111)	$	35,394	$	(2,097)	$	91,082	$	(3,208)
Collateralized mortgage obligations		70,680		(1,673)		36,991		(2,001)		107,671		(3,674)
Municipal obligations		81,686		(2,009)		11,018		(766)		92,704		(2,775)
Corporate obligations		-		-		2,120		(877)		2,120		(877)
Total temporarily impaired securities	$	208,054	$	(4,793)	$	85,523	$	(5,741)	$	293,577	$	(10,534)



	December 31, 2017
	Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale Securities
Mortgage-backed securities	$	21,975	$	(127)	$	27,675	$	(635)	$	49,650	$	(762)
Collateralized mortgage obligations		47,153		(400)		28,887		(896)	$	76,040	$	(1,296)
Municipal obligations		4,479		(64)		10,041		(210)		14,520		(274)
Corporate obligations		-		-		2,722		(1,200)		2,722		(1,200)
Total temporarily impaired securities	$	73,607	$	(591)	$	69,325	$	(2,941)	$	142,932	$	(3,532)

Pooled Trust Preferred Collateralized Debt Obligations

The following table provides additional information related to the Bank’s investment in a pooled trust preferred security as of September 30, 2018:



Deal Name	Class	Original Par		Book Value		Fair Value		Unrealized Loss		Realized Losses 2018		Lowest Ratings	Number of Banks / Insurance Cos. Currently Performing	Total Number of Banks and Insurance Cos. In Issuance (Unique)	Actual Deferrals/ Defaults (as a % of original collateral)		Total Projected Defaults (as a % of performing collateral) (1)		Excess subordination (after taking into account best estimate of future deferrals/ defaults) (2)
	(Dollars in Thousands)
U.S. Capital Funding I	B1	$	3,000	$	2,997	$	2,120	$	(877)	$	-	Caa1	26	30	7.95	%	5.92	%	12.29	%

(1) A 10% recovery is applied to all projected defaults by depository institutions. A 15% recovery is applied to all projected defaults by insurance companies.
No recovery is applied to current defaults.
(2) Excess subordination represents the additional defaults in excess of both current and projected defaults that the collateralized debt obligation can absorb
before the bond experiences any credit impairment. Excess subordinated percentage is calculated by (a) determining what percentage of defaults a pool
can experience before the bond has credit impairment, and (b) subtracting from this default breakage percentage both total current and expected future
default percentages.

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details