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Investments
 6 Months Ended
Jun. 30, 2015
Investments [Abstract]  
Investments
Investments
Securities Available For Sale, at Fair Value
The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at June 30, 2015 and December 31, 2014:
(Dollars in thousands)
June 30, 2015
 
December 31, 2014
Amortized
Cost
 
Gross Unrealized
 
Estimated
Fair Value
 
Amortized
Cost
 
Gross Unrealized
 
Estimated
Fair Value
Gain
 
Loss
 
Gain
 
Loss
 
Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage backed securities issued by U.S. Agencies(1)
$
50,451

 
$
13

 
$
(990
)
 
$
49,474

 
$
54,653

 
$
26

 
$
(940
)
 
$
53,739

Residential collateralized mortgage obligations issued by non agencies(1)
731

 
—

 
(16
)
 
715

 
790

 
—

 
(13
)
 
777

Asset backed security(2)
2,050

 
—

 
(585
)
 
1,465

 
2,083

 
—

 
(433
)
 
1,650

Mutual funds(3)
4,750

 
37

 
(45
)
 
4,742

 
4,750

 
45

 
(35
)
 
4,760

Total
$
57,982

 
$
50

 
$
(1,636
)
 
$
56,396

 
$
62,276

 
$
71

 
$
(1,421
)
 
$
60,926

 
 

(1)
Secured by closed-end first liens on 1-4 family residential mortgages.
(2)
Comprised of a security that represents an interest in a pool of trust preferred securities issued by U.S.-based banks and insurance companies.
(3)
Consists primarily of mutual fund investments in closed-end first lien 1-4 family residential mortgages.
At June 30, 2015, U.S. agency mortgage backed securities with an aggregate fair market value of $3.8 million were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts. At December 31, 2014, U.S. agency mortgage backed securities and collateralized mortgage obligations with an aggregate fair market value of $3.6 million were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts.
The amortized cost and estimated fair values of securities available for sale at June 30, 2015 and December 31, 2014 are shown in the tables below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.
 
At June 30, 2015 Maturing in
(Dollars in thousands)
One year
or less
 
Over one
year through
five years
 
Over five
years through
ten years
 
Over ten
Years
 
Total
Securities available for sale, amortized cost
$
7,616

 
$
28,071

 
$
15,445

 
$
6,850

 
$
57,982

Securities available for sale, estimated fair value
7,443

 
27,739

 
15,064

 
6,150

 
56,396

Weighted average yield
1.56
%
 
1.63
%
 
1.58
%
 
1.90
%
 
1.63
%
 
At December 31, 2014 Maturing in
(Dollars in thousands)
One year
or less
 
Over one
year through
five years
 
Over five
years through
ten years
 
Over ten
Years
 
Total
Securities available for sale, amortized cost
$
7,483

 
$
29,008

 
$
17,448

 
$
8,337

 
$
62,276

Securities available for sale, estimated fair value
7,359

 
28,614

 
17,148

 
7,805

 
60,926

Weighted average yield
1.54
%
 
1.64
%
 
1.60
%
 
1.83
%
 
1.64
%

 
We had no sales of securities available for sale during the three and six months ended June 30, 2015 and 2014.
The tables below indicate, as of June 30, 2015 and December 31, 2014, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.
 
Securities with Unrealized Loss at June 30, 2015
 
Less than 12 months
 
12 months or more
 
Total
(Dollars in thousands)
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
Residential mortgage backed securities issued by U.S. Agencies
$
22,504

 
$
(143
)
 
$
25,854

 
$
(847
)
 
$
48,358

 
$
(990
)
Residential collateralized mortgage obligations issued by non-agencies
—

 
—

 
716

 
(16
)
 
716

 
(16
)
Asset backed security
—

 
—

 
1,465

 
(585
)
 
1,465

 
(585
)
Mutual funds
2,455

 
(45
)
 
—

 
—

 
2,455

 
(45
)
Total
$
24,959

 
$
(188
)
 
$
28,035

 
$
(1,448
)
 
$
52,994

 
$
(1,636
)
  
Securities With Unrealized Loss at December 31, 2014
 
Less than 12 months
 
12 months or more
 
Total
(Dollars In thousands)
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
Residential mortgage backed securities issued by U.S. Agencies
$
—

 
$
—

 
$
50,697

 
$
(940
)
 
$
50,697

 
$
(940
)
Residential collateralized mortgage obligations issued by non-agencies
—

 
—

 
776

 
(13
)
 
776

 
(13
)
Asset-backed security
—

 
—

 
1,651

 
(433
)
 
1,651

 
(433
)
Mutual funds
2,464

 
(35
)
 
—

 
—

 
2,464

 
(35
)
Total
$
2,464

 
$
(35
)
 
$
53,124

 
$
(1,386
)
 
$
55,588

 
$
(1,421
)

We regularly monitor investments for significant declines in fair value. We have determined that declines in the fair values of these investments below their respective amortized costs, as set forth in the tables above, are temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the ability to hold those securities until there is a recovery in their values or until their maturity.
We recognize other-than-temporary impairments (“OTTI”) to our available-for-sale debt securities in accordance with FASB ASC 320-10. When there are credit losses associated with, but we have no intention to sell, an impaired debt security, and it is more likely than not that we will not have to sell the security before recovery of its cost basis, we will separate the amount of impairment, or OTTI, between the amount that is credit related and the amount that is related to non-credit factors. Credit-related impairments are recognized in our consolidated statements of operations. Any non-credit-related impairments are recognized and reflected in other comprehensive income (loss) in our consolidated statements of financial condition.
Through the impairment assessment process, we determined that the available-for-sale securities discussed below were other-than-temporarily impaired at June 30, 2015. We recorded no impairment credit losses on available-for-sale securities in our consolidated statements of operations for the three and six months ended June 30, 2015 and 2014. The OTTI related to factors other than credit losses, in the aggregate amount of $585 thousand, and was recognized as other comprehensive loss in our accompanying consolidated statement of financial condition as of June 30, 2015.

The table below presents, for the six months ended June 30, 2015, a roll-forward of OTTI in those instances when a portion of the OTTI was attributable to non-credit related factors and, therefore, was recognized in other comprehensive loss:
(Dollars in thousands)
Gross Other-
Than-
Temporary
Impairments
 
Other-Than-
Temporary
Impairments
Included in Other
Comprehensive
Loss
 
Net Other-Than-
Temporary
Impairments
Included in
Retained  Earnings
(Deficit)
Balance – December 31, 2014
$
(986
)
 
$
(433
)
 
$
(553
)
Change in market value on a security for which an OTTI was previously recognized
(180
)
 
(180
)
 
—

Principal received on OTTI security
28

 
28

 
—

Balance – June 30, 2015
$
(1,138
)
 
$
(585
)
 
$
(553
)

In determining the component of OTTI related to credit losses, we compare the amortized cost basis of each OTTI security to the present value of its expected cash flows, discounted using the effective interest rate implicit in the security at the date of acquisition.
As a part of our OTTI assessment process with respect to securities available for sale with unrealized losses, we consider available information about (i) the performance of the collateral underlying each such security, including any credit enhancements, (ii) historical prepayment speeds, (iii) delinquency and default rates, (iv) loss severities, (v) the age or “vintage” of the security, and (vi) any rating agency reports on the security. Significant judgments are required with respect to these and other factors in order to make a determination of the future cash flows that can be expected to be generated by the security.
Based on our OTTI assessment process, we determined that there is one asset-backed security in our portfolio of securities available for sale that was impaired as of June 30, 2015. This security is a multi-class, cash flow collateralized bond obligation backed by a pool of trust preferred securities issued by a diversified pool of 56 issuers that consisted of 45 U.S. depository institutions and 11 insurance companies at the time of the security’s issuance in November 2007. We purchased $3.0 million face amount of this security in November 2007 at a price of 95.21% for a total purchase price of $2.9 million, out of a total of $363 million of this security sold at the time of issuance. The security that we own (CUSIP 74042CAE8) is the mezzanine class B piece security with a variable interest rate of 3 month LIBOR plus 60 basis points, which had a rating of Aa2 and AA by Moody’s and Fitch, respectively, at the time of issuance in 2007.
As of June 30, 2015, the amortized cost of this security was $2.1 million with a fair value of $1.5 million, for an unrealized loss of approximately $585 thousand. As of June 30, 2015, the security had a Baa3 rating from Moody’s and a CCC rating from Fitch and had experienced $42.5 million in defaults (12.5% of total current collateral) and $12.0 million in deferring securities (3.5% of total current collateral) from issuance to June 30, 2015. As of June 30, 2015, the mezzanine class B tranche had $52.5 million in excess subordination.
 
We have made a determination that the remainder of our securities with respect to which there were unrealized losses as of June 30, 2015 are not other-than-temporarily impaired, because we have concluded that we have the ability to continue to hold those securities until their respective fair market values increase above their respective amortized costs or, if necessary, until their respective maturities. In reaching that conclusion we considered a number of factors and other information, which included: (i) the significance of each such security, (ii) the amount of the unrealized losses attributable to each such security, (iii) our liquidity position, (iv) the impact that retention of those securities could have on our capital position and (v) our evaluation of the expected future performance of these securities (based on the criteria discussed above).

Other Investments
As of December 31, 2014, we had one investment in a limited partnership which was accounted for under the equity method of accounting and included within other assets on the consolidated statements of financial condition. During the six months ended June 30, 2015, we redeemed 100% of our investment in the limited partnership for a return of capital of $2.1 million. As of June 30, 2015 and December 31, 2014, our other investment was as follows:
 
June 30, 2015
 
December 31, 2014
 
(Dollars in thousands)
Investment accounted for under the equity method
$
—

 
$
2,081