Note 6 - Investment Securities (Tables)

3 Months Ended

Mar. 31, 2017

Investments Debt And Equity Securities [Abstract]

Trading securities, at fair value, at March 31, 2017 and December 31, 2016 were as follows:

	March 31,		December 31,
	2017		2016
State and municipal securities	$	2,358	$	3,596

Investment Securities Available-for-sale

The amortized cost and estimated fair values of investment securities available-for-sale at March 31, 2017 and December 31, 2016 were as follows:

			Gross		Gross
			unrealized		unrealized
	Fair		holding		holding			Amortized
March 31, 2017	value		gains		losses			cost
U.S. Government agency	$	70,646	$	25	$	(1,847	)	$	72,468
State and municipal		75,728		714		(272	)		75,286
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		142,230		448		(2,080	)		143,862
Collateralized mortgage obligations (CMOs)		77,106		67		(1,775	)		78,814
Pooled trust preferred		2,423		295		(748	)		2,876
Corporate debt		8,056		29		(40	)		8,067
Equity		6,107		181		(190	)		6,116
Total investment securities available-for-sale	$	382,296	$	1,759	$	(6,952	)	$	387,489

			Gross		Gross
			unrealized		unrealized
	Fair		holding		holding			Amortized
December 31, 2016	value		gains		losses			cost
U.S. Government agency	$	76,650	$	36	$	(2,118	)	$	78,732
State and municipal		72,295		614		(398	)		72,079
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		145,301		561		(2,241	)		146,981
Collateralized mortgage obligations (CMOs)		77,415		109		(1,846	)		79,152
Pooled trust preferred		2,281		263		(891	)		2,909
Corporate debt		8,030		16		(57	)		8,071
Equity		8,503		587		(328	)		8,244
Total investment securities available-for-sale	$	390,475	$	2,186	$	(7,879	)	$	396,168

Investment Securities by Contractual Maturity

The amortized cost and estimated fair value of securities available-for-sale by contractual maturity at March 31, 2017 are shown in the following table.

			Amortized
March 31, 2017	Fair value		cost
Due in one year or less	$	8,664	$	8,589
Due after one year through five years		171,182		172,475
Due after five years through ten years		176,653		180,017
Due after ten years		19,690		20,292
Equity securities		6,107		6,116
Total investment securities available-for-sale	$	382,296	$	387,489

Realized Gain (Loss) on Investments

The following table presents information related to the Company’s gains and losses on the sales of equity and debt securities, and losses recognized for the other-than-temporary impairment (“OTTI”) of these investments.

	Three months ended March 31, 2017									Three months ended March 31, 2016
						Other-than-									Other-than-
	Gross		Gross			temporary				Gross		Gross			temporary
	realized		realized			impairment				realized		realized			impairment
	gains		losses			losses		Net gains		gains		losses			losses			Net gains
Equity securities	$	725	$	—		$	—	$	725	$	382	$	—		$	(70	)	$	312
Debt securities		78		(54	)		—		24		80		(73	)		—			7
Total	$	803	$	(54	)	$	—	$	749	$	462	$	(73	)	$	(70	)	$	319

The table presents a summary of the cumulative credit-related other-than-temporary impairment charges recognized as components of earnings for debt securities still held by QNB:

Three months ended March 31,	2017		2016
Balance, beginning of period	$	1,153	$	1,153
Additions:
Initial credit impairments		—		—
Subsequent credit impairments		—		—
Balance, end of period	$	1,153	$	1,153

Securities in a Continuous Unrealized Loss Position

The following table indicates the length of time individual securities have been in a continuous unrealized loss position at March 31, 2017 and December 31, 2016:


			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
March 31, 2017	securities		value		losses			value		losses			value		losses
U.S. Government agency		50	$	66,631	$	(1,847	)	$	—	$	—		$	66,631	$	(1,847	)
State and municipal		66		26,959		(272	)		—		—			26,959		(272	)
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		87		120,209		(2,080	)		—		—			120,209		(2,080	)
Collateralized mortgage obligations (CMOs)		70		59,295		(1,236	)		14,644		(539	)		73,939		(1,775	)
Pooled trust preferred		5		—		—			2,068		(748	)		2,068		(748	)
Corporate debt		4		4,015		(40	)		—		—			4,015		(40	)
Equity		8		2,004		(170	)		183		(20	)		2,187		(190	)
Total		290	$	279,113	$	(5,645	)	$	16,895	$	(1,307	)	$	296,008	$	(6,952	)


			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2016	securities		value		losses			value		losses			value		losses
U.S. Government agency		55	$	72,626	$	(2,118	)	$	—	$	—		$	72,626	$	(2,118	)
State and municipal		70		29,280		(398	)		—		—			29,280		(398	)
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		88		123,087		(2,241	)		—		—			123,087		(2,241	)
Collateralized mortgage obligations (CMOs)		68		56,853		(1,269	)		15,426		(577	)		72,279		(1,846	)
Pooled trust preferred		5		—		—			1,952		(891	)		1,952		(891	)
Corporate debt		4		4,002		(57	)		—		—			4,002		(57	)
Equity		16		2,985		(268	)		888		(60	)		3,873		(328	)
Total		306	$	288,833	$	(6,351	)	$	18,266	$	(1,528	)	$	307,099	$	(7,879	)

Pooled Trust Preferred Securities

The following table provides additional information related to pooled trust preferred securities (PreTSLs) as of March 31, 2017:

Deal	Class		Book value		Fair value		Unrealized gains (losses)			Realized OTTI credit loss (YTD 2017)		Total recognized OTTI credit loss			Moody's /Fitch ratings	Current number of performing banks		Current number of performing insurance companies		Actual deferrals and defaults as a % of total collateral			Total performing collateral as a % of outstanding bonds
PreTSL IV	Mezzanine	*	$	242	$	188	$	(54	)	$	—	$	(1	)	B1/BB		5		—		18.0	%		141.6	%
PreTSL XVII	Mezzanine			588		486		(102	)		—		(222	)	C/CC		34		5		21.7			100.3
PreTSL XIX	Mezzanine			837		498		(339	)		—		—		Caa1/CC		41		12		6.9			103.1
PreTSL XXV	Mezzanine			766		541		(225	)		—		(222	)	Ca/C		44		5		24.2			89.9
PreTSL XXVI	Mezzanine			383		355		(28	)		—		(270	)	Caa3/C		44		7		18.2			98.1
PreTSL XXVI	Mezzanine			60		355		295			—		(438	)	Caa3/C		44		7		18.2			98.1
			$	2,876	$	2,423	$	(453	)	$	—	$	(1,153	)

- 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