Note 5 - Securities

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

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

NOTE 5. SECURITIES

Securities are classified as available-for-sale if the Company intends and has the ability to hold those securities for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available-for-sale are carried at fair value. Unrealized holding gains or losses are included in accumulated other comprehensive income (loss) as a separate component of shareholders’ equity, net of tax. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Premiums and discounts are amortized or accreted over the life of the related investment security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.

Debt securities are classified as held-to-maturity if the Company has both the intent and ability to hold those securities to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for amortization of premium and accretion of discount, computed by the effective interest method over their contractual lives.

Transfers of securities from available-for-sale to held-to-maturity are accounted for at fair value as of the date of the transfer. The difference between the fair value and the amortized cost at the date of transfer is considered a premium or discount and is accounted for accordingly. Any unrealized gain or loss at the date of the transfer is reported in other accumulated comprehensive income (loss), and is amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount, and will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held-to-maturity security. The Company did not have any transfers in or out of the various securities classifications for the six months ended June 30, 2015 and twelve months ended December 31, 2014.

The following table presents the amortized costs, unrealized gains, unrealized losses and approximate fair values of investment securities as of June 30, 2015, and December 31, 2014:

	As of June 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
(Amounts in thousands)	Costs		Gains		Losses			Fair Value
Available-for-sale securities:
U.S. government & agencies	$	5,229	$	88	$	(3	)	$	5,314
Obligations of state and political subdivisions		49,883		1,541		(100	)		51,324
Residential mortgage backed securities and collateralized mortgage obligations		37,745		285		(254	)		37,776
Corporate securities		33,380		309		(188	)		33,501
Commercial mortgage backed securities		9,558		34		(125	)		9,467
Other asset backed securities		23,448		139		(206	)		23,381
Total	$	159,243	$	2,396	$	(876	)	$	160,763
Held-to-maturity securities:
Obligations of state and political subdivisions	$	36,655	$	538	$	(763	)	$	36,430

	As of December 31, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
(Amounts in thousands)	Costs		Gains		Losses			Fair Value
Available-for-sale securities:
U.S. government & agencies	$	6,351	$	58	$	(16	)	$	6,393
Obligations of state and political subdivisions		52,629		1,788		(54	)		54,363
Residential mortgage backed securities and collateralized mortgage obligations		46,727		457		(169	)		47,015
Corporate securities		37,392		475		(133	)		37,734
Commercial mortgage backed securities		10,402		60		(73	)		10,389
Other asset backed securities		30,896		393		(197	)		31,092
Total	$	184,397	$	3,231	$	(642	)	$	186,986
Held-to-maturity securities:
Obligations of state and political subdivisions	$	36,806	$	712	$	(400	)	$	37,118

The following table presents the maturities of investment securities at June 30, 2015:

	Available-For-Sale				Held-To-Maturity
(Amounts in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	3,689	$	3,695	$	—	$	—
One year through five years		57,535		57,927		1,494		1,505
Five years through ten years		35,058		35,447		16,065		16,134
After ten years		62,961		63,694		19,096		18,791
Total	$	159,243	$	160,763	$	36,655	$	36,430

The amortized cost and fair value of residential mortgage backed, collateralized mortgage obligations and commercial mortgage securities are presented by their expected average life, rather than contractual maturity, because the underlying loans may be repaid without prepayment penalties.

The following table presents the fair value of the securities held for pledging, segregated by purpose, as of June 30, 2015:

(Amounts in thousands)	Pledged		Available To Be Pledged		Total Held For Pledging Purposes
Public funds collateral	$	15,577	$	8,750	$	24,327
Federal Home Loan Bank of San Francisco borrowings		—		20,209		20,209
Interest rate swap contracts		3,731		320		4,051
Total	$	19,308	$	29,279	$	48,587

The following table presents the cash proceeds from sales of securities and their associated gross realized gains and gross realized losses that have been included in earnings for the three and six months ended June 30, 2015 and 2014.

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2015			2014			2015			2014
Proceeds from sales of securities	$	10,697		$	32,099		$	35,912		$	68,785
Gross realized gains on sales of securities:
Obligations of state and political subdivisions	$	37		$	14		$	70		$	171
Residential mortgage backed securities and collateralized mortgage obligations		49			63			62			68
Corporate securities		—			85			82			227
Commercial mortgage backed securities		—			5			4			5
Other asset backed securities		—			40			93			63
Total gross realized gains on sales of securities		86			207			311			534
Gross realized losses on sales of securities:
U.S. government & agencies		(1	)		(115	)		(1	)		(114	)
Obligations of state and political subdivisions		—			(69	)		—			(159	)
Residential mortgage backed securities and collateralized mortgage obligations		—			(13	)		(9	)		(482	)
Corporate securities		—			(8	)		—			(8	)
Commercial mortgage backed securities					(31	)		—			(32	)
Other asset backed securities		(24	)		(10	)		(25	)		(23	)
Total gross realized losses on sales of securities		(25	)		(246	)		(35	)		(818	)
Gain (loss) on investment securities, net	$	61		$	(39	)	$	276		$	(284	)

Investment securities that were in an unrealized loss position as of June 30, 2015 and December 31, 2014 are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position. In the opinion of management, these securities are considered only temporarily impaired due to changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or underlying collateral.

	As of June 30, 2015
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Value		Losses			Value		Losses			Value		Losses
Available-for-sale securities:
U.S. government & agencies	$	1,250	$	(3	)	$	—	$	—		$	1,250	$	(3	)
Obligations of states and political subdivisions		5,431		(100	)		—		—			5,431		(100	)
Residential mortgage backed securities and collateralized mortgage obligations		10,113		(175	)		3,993		(79	)		14,106		(254	)
Corporate securities		14,652		(135	)		3,475		(53	)		18,127		(188	)
Commercial mortgage backed securities		5,273		(76	)		1,546		(49	)		6,819		(125	)
Other asset backed securities		4,675		(27	)		5,689		(179	)		10,364		(206	)
Total temporarily impaired securities	$	41,394	$	(516	)	$	14,703	$	(360	)	$	56,097	$	(876	)
Held-to-maturity securities:
Obligations of states and political subdivisions	$	11,680	$	(329	)	$	5,130	$	(434	)	$	16,810	$	(763	)

	As of December 31, 2014
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Value		Losses			Value		Losses			Value		Losses
Available-for-sale securities:
U.S. government & agencies	$	—	$	—		$	1,269	$	(16	)	$	1,269	$	(16	)
Obligations of states and political subdivisions		3,952		(34	)		2,078		(20	)		6,030		(54	)
Residential mortgage backed securities and collateralized mortgage obligations		10,193		(66	)		5,365		(103	)		15,558		(169	)
Corporate securities		7,058		(36	)		6,542		(97	)		13,600		(133	)
Commercial mortgage backed securities		4,912		(14	)		1,542		(59	)		6,454		(73	)
Other asset backed securities		4,891		(16	)		6,088		(181	)		10,979		(197	)
Total temporarily impaired securities	$	31,006	$	(166	)	$	22,884	$	(476	)	$	53,890	$	(642	)
Held-to-maturity securities:
Obligations of states and political subdivisions	$	1,556	$	(14	)	$	12,726	$	(386	)	$	14,282	$	(400	)

At June 30, 2015, 78 securities were in unrealized loss positions and at December 31, 2014, 73 securities were in unrealized loss positions. For the six months ended June 30, 2015, the Company did not recognize impairment losses. For the year ended December 31, 2014, the Company recognized an other-than-temporary impairment of $22 thousand for securities that were in a loss position at December 31, 2014 and sold in January of 2015.