Note 5 - Securities

9 Months Ended

Sep. 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.

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 nine months ended September 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 September 30, 2015, and December 31, 2014.

	As of September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
(Amounts in thousands)	Cost		Gain		Loss			Fair Value
Available-for-sale securities:
U.S. government & agencies	$	3,931	$	67	$	—		$	3,998
Obligations of state and political subdivisions		55,778		1,740		(65	)		57,453
Residential mortgage backed securities and collateralized mortgage obligations		34,091		215		(248	)		34,058
Corporate securities		36,531		282		(253	)		36,560
Commercial mortgage backed securities		9,358		10		(102	)		9,266
Other asset backed securities		15,994		91		(111	)		15,974
Total	$	155,683	$	2,405	$	(779	)	$	157,309
Held-to-maturity securities:
Obligations of state and political subdivisions	$	36,093	$	693	$	(492	)	$	36,294

	As of December 31, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
(Amounts in thousands)	Cost		Gain		Loss			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 September 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	$	7,237	$	7,258	$	—	$	—
One year through five years		51,370		51,602		1,504		1,540
Five years through ten years		50,613		51,544		16,619		16,874
After ten years		46,463		46,905		17,970		17,880
Total	$	155,683	$	157,309	$	36,093	$	36,294

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 September 30, 2015.

(Amounts in thousands)	Pledged		Available To Be Pledged		Total Held For Pledging Purposes
Public funds collateral	$	19,083	$	9,923	$	29,006
Federal Home Loan Bank of San Francisco borrowings		—		16,629		16,629
Interest rate swap contracts		3,136		1,361		4,497
Total	$	22,219	$	27,913	$	50,132

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(Amounts in thousands)	2015			2014			2015			2014
Proceeds from sales of securities	$	25,340		$	13,036		$	61,255		$	81,820
Gross realized gains on sales of securities:
Obligations of state and political subdivisions	$	16		$	44		$	86		$	215
Residential mortgage backed securities and collateralized mortgage obligations		49			7			111			75
Corporate securities		52			82			134			309
Commercial mortgage backed securities		10			—			14			5
Other asset backed securities		50			10			142			73
Total gross realized gains on sales of securities		177			143			487			677
Gross realized losses on sales of securities:
U.S. government & agencies		(4	)		—			(5	)		(114	)
Obligations of state and political subdivisions		(4	)		(50	)		(4	)		(209	)
Residential mortgage backed securities and collateralized mortgage obligations		(2	)		(61	)		(12	)		(543	)
Corporate securities		—			—			—			(8	)
Commercial mortgage backed securities		—			—			—			(33	)
Other asset backed securities		(30	)		—			(53	)		(22	)
Total gross realized losses on sales of securities		(40	)		(111	)		(74	)		(929	)
Gain (loss) on investment securities, net	$	137		$	32		$	413		$	(252	)

Investment securities that were in an unrealized loss position as of September 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 September 30, 2015
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Value			Loss		Value			Loss		Value			Loss
Available-for-sale securities:
U.S. government & agencies	$	—	$	—		$	—	$	—		$	—	$	—
Obligations of states and political subdivisions		6,284		(60	)		358		(5	)		6,642		(65	)
Residential mortgage backed securities and collateralized mortgage obligations		14,174		(155	)		3,629		(93	)		17,803		(248	)
Corporate securities		18,600		(232	)		3,478		(21	)		22,078		(253	)
Commercial mortgage backed securities		5,040		(50	)		1,539		(52	)		6,579		(102	)
Other asset backed securities		2,668		(2	)		3,581		(109	)		6,249		(111	)
Total temporarily impaired securities	$	46,766	$	(499	)	$	12,585	$	(280	)	$	59,351	$	(779	)
Held-to-maturity securities:
Obligations of states and political subdivisions	$	7,829	$	(182	)	$	4,679	$	(310	)	$	12,508	$	(492	)

	As of December 31, 2014
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Value			Loss		Value			Loss		Value			Loss
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 September 30, 2015, 67 securities were in unrealized loss positions and at December 31, 2014, 73 securities were in unrealized loss positions. For the nine months ended September 30, 2015, the Company did not recognize any other-than-temporary 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.