Note 6 - Investment Securities (Tables)

6 Months Ended

Jun. 30, 2018

Investments Debt And Equity Securities [Abstract]

Investment Debt Securities Available-for-sale and Equity Securities

The amortized cost and estimated fair values of investment debt securities available-for-sale and equity securities at June 30, 2018 and December 31, 2017 were as follows:

			Gross		Gross
			unrealized		unrealized
	Fair		holding		holding			Amortized
June 30, 2018	value		gains		losses			cost
U.S. Government agency	$	69,495	$	—	$	(2,982	)	$	72,477
State and municipal		70,952		236		(662	)		71,378
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		127,426		95		(5,214	)		132,545
Collateralized mortgage obligations (CMOs)		71,257		11		(3,525	)		74,771
Pooled trust preferred		118		—		(5	)		123
Corporate debt		4,946		14		(103	)		5,035
Equity		9,600		360		(887	)		10,127
Total investment debt securities available-for-sale and equity securities	$	353,794	$	716	$	(13,378	)	$	366,456

			Gross		Gross
			unrealized		unrealized
	Fair		holding		holding			Amortized
December 31, 2017	value		gains		losses			cost
U.S. Government agency	$	70,524	$	—	$	(1,948	)	$	72,472
State and municipal		76,804		717		(113	)		76,200
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		142,703		195		(2,401	)		144,909
Collateralized mortgage obligations (CMOs)		76,302		29		(2,292	)		78,565
Pooled trust preferred		215		—		(26	)		241
Corporate debt		8,022		6		(37	)		8,053
Equity		4,975		28		(349	)		5,296
Total investment debt securities available-for-sale and equity securities	$	379,545	$	975	$	(7,166	)	$	385,736

Investment Securities by Contractual Maturity

The amortized cost and estimated fair value of debt securities available-for-sale by contractual maturity at June 30, 2018 are shown in the following table.

			Amortized
June 30, 2018	Fair value		cost
Due in one year or less	$	6,938	$	6,922
Due after one year through five years		185,003		191,920
Due after five years through ten years		131,117		135,913
Due after ten years		21,136		21,574
Total investment debt securities available-for-sale	$	344,194	$	356,329

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 June 30, 2018													Three months ended June 30, 2017
					Other-than-														Other-than-
	Gross		Gross		temporary		Gross		Gross					Gross		Gross			temporary
	realized		realized		impairment		unrealized		unrealized			Net		realized		realized			impairment		Net
	gains		losses		losses		gains		losses			gains		gains		losses			losses		gains/(losses)
Equity securities	$	44	$	—	$	—	$	375	$	(334	)	$	85	$	131	$	—		$	—	$	131
Debt securities available-for-sale		4		—		—		—		—			4		431		(447	)		—		(16	)
Total	$	48	$	—	$	—	$	375	$	(334	)	$	89	$	562	$	(447	)	$	—	$	115

	Six months ended June 30, 2018															Six months ended June 30, 2017
						Other-than-															Other-than-
	Gross		Gross			temporary		Gross		Gross						Gross		Gross			temporary
	realized		realized			impairment		unrealized		unrealized			Net			realized		realized			impairment		Net
	gains		losses			losses		gains		losses			gains/(losses)			gains		losses			losses		gains
Equity securities	$	130	$	—		$	—	$	349	$	(554	)	$	(75	)	$	856	$	—		$	—	$	856
Debt securities available-for-sale		25		(22	)		—		—		—			3			509		(501	)		—		8
Total	$	155	$	(22	)	$	—	$	349	$	(554	)	$	(72	)	$	1,365	$	(501	)	$	—	$	864

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:

Six months ended June 30,	2018		2017
Balance, beginning of period	$	1	$	1,153
Reductions: sale, collaterized debt obligation		—		(1,152	)
Additions:
Initial credit impairments		—		—
Subsequent credit impairments		—		—
Balance, end of period	$	1	$	1

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 June 30, 2018 and December 31, 2017:


			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2018	securities		value		losses			value		losses			value		losses
U.S. Government agency		53	$	8,731	$	(258	)	$	60,764	$	(2,724	)	$	69,495	$	(2,982	)
State and municipal		99		35,507		(492	)		5,604		(170	)		41,111		(662	)
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		108		53,757		(1,795	)		71,300		(3,419	)		125,057		(5,214	)
Collateralized mortgage obligations (CMOs)		77		21,839		(712	)		48,757		(2,813	)		70,596		(3,525	)
Pooled trust preferred		1		—		—			118		(5	)		118		(5	)
Corporate debt		4		2,963		(68	)		969		(35	)		3,932		(103	)
Equity		19		4,128		(550	)		832		(337	)		4,960		(887	)
Total		361	$	126,925	$	(3,875	)	$	188,344	$	(9,503	)	$	315,269	$	(13,378	)


			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2017	securities		value		losses			value		losses			value		losses
U.S. Government agency		53	$	10,828	$	(155	)	$	59,696	$	(1,793	)	$	70,524	$	(1,948	)
State and municipal		37		10,577		(49	)		4,446		(64	)		15,023		(113	)
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		99		61,069		(705	)		72,318		(1,696	)		133,387		(2,401	)
Collateralized mortgage obligations (CMOs)		70		21,660		(349	)		52,833		(1,943	)		74,493		(2,292	)
Pooled trust preferred		1		—		—			215		(26	)		215		(26	)
Corporate debt		4		3,018		(20	)		988		(17	)		4,006		(37	)
Equity		11		2,727		(277	)		275		(72	)		3,002		(349	)
Total		275	$	109,879	$	(1,555	)	$	190,771	$	(5,611	)	$	300,650	$	(7,166	)

Pooled Trust Preferred Securities

The following table provides additional information related to the pooled trust preferred security (PreTSL) as of June 30, 2018:

Deal

Class

Book

value

Fair

value

Unrealized

gains (losses)

Realized

OTTI

credit

loss

(YTD 2018)

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

123

118

)

—

)

Ba1/BB

—

0.00

185.4