Securities

12 Months Ended

Dec. 31, 2014

Investments debt and equity securities [Abstract]

Investments In Debt And Marketable Equity Securities And Certain Trading Assets Disclosure Text Block

NOTE 5: SECURITIES

At December 31, 2014 and 2013, respectively, all securities within the scope of ASC 320, Investments – Debt and Equity Securities were classified as available-for-sale. The fair value and amortized cost for securities available-for-sale by contractual maturityDecember 31, 2014 and 2013, respectively, are presented below.

			1 year	1 to 5	5 to 10	After 10	Fair	Gross Unrealized		Amortized
(Dollars in thousands)			or less	years	years	years	Value	Gains	Losses	Cost
December 31, 2014
Agency obligations (a)		$	—	30,947	14,869	14,433	60,249	375	830	$	60,704
Agency RMBS (a)			—	—	14,523	120,520	135,043	1,597	616		134,062
State and political subdivisions			—	502	15,520	56,289	72,311	3,379	34		68,966
	Total available-for-sale	$	—	31,449	44,912	191,242	267,603	5,351	1,480	$	263,732
December 31, 2013
Agency obligations (a)		$	—	—	23,247	21,275	44,522	—	4,557	$	49,079
Agency RMBS (a)			—	—	8,306	154,052	162,358	976	4,733	$	166,115
State and political subdivisions			—	1,735	21,366	41,238	64,339	1,560	459	$	63,238
	Total available-for-sale	$	—	1,735	52,919	216,565	271,219	2,536	9,749	$	278,432
(a) Includes securities issued by U.S. government agencies or government sponsored entities.

Securities with aggregate fair values of $132.2 million and $120.5 million at December 31, 2014 and 2013, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase, Federal Home Loan Bank (“FHLB”) advances, and for other purposes required or permitted by law.

Included in other assets on the accompanying consolidated balance sheets are cost-method investments. The carrying amounts of cost-method investments were $1.6 and $1.8 million at December 31, 2014 and 2013, respectively. Cost-method investments primarily include non-marketable equity investments, such as FHLB of Atlanta stock and Federal Reserve Bank (“FRB”) stock.

Gross Unrealized Losses and Fair Value

The fair values and gross unrealized losses on securities at December 31, 2014 and 2013, respectively, segregated by those securities that have been in an unrealized loss position for less than 12 months and 12 months or more are presented below.

			Less than 12 Months		12 Months or Longer		Total
			Fair	Unrealized	Fair	Unrealized	Fair		Unrealized
(Dollars in thousands)			Value	Losses	Value	Losses	Value		Losses
December 31, 2014:
Agency obligations		$	—	—	24,126	830	24,126	$	830
Agency RMBS			9,078	22	42,744	594	51,822		616
State and political subdivisions			4,257	34	—	—	4,257		34
	Total	$	13,335	56	66,870	1,424	80,205	$	1,480

December 31, 2013:
Agency obligations		$	35,932	3,181	8,590	1,376	44,522	$	4,557
Agency RMBS			109,774	4,394	7,683	339	117,457		4,733
State and political subdivisions			9,575	459	—	—	9,575		459
	Total	$	155,281	8,034	16,273	1,715	171,554	$	9,749

For the securities in the previous table, the Company does not have the intent to sell and has determined it is not more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis, which may be maturity. The Company assesses each security for credit impairment. For debt securities, the Company evaluates, where necessary, whether credit impairment exists by comparing the present value of the expected cash flows to the securities’ amortized cost basis. For cost-method investments, the Company evaluates whether an event or change in circumstances has occurred during the reporting period that may have a significant adverse effect on the fair value of the investment.

In determining whether a loss is temporary, the Company considers all relevant information including:

• the length of time and the extent to which the fair value has been less than the amortized cost basis;
• adverse conditions specifically related to the security, an industry, or a geographic area (for example, changes in the financial condition of the issuer of the security, or in the case of an asset-backed debt security, in the financial condition of the underlying loan obligors, including changes in technology or the discontinuance of a segment of the business that may affect the future earnings potential of the issuer or underlying loan obligors of the security or changes in the quality of the credit enhancement);
• the historical and implied volatility of the fair value of the security;
• the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future;
• failure of the issuer of the security to make scheduled interest or principal payments;
• any changes to the rating of the security by a rating agency; and
• recoveries or additional declines in fair value subsequent to the balance sheet date.

Agency obligations

The unrealized losses associated with agency obligations were primarily driven by changes in interest rates and not due to the credit quality of the securities. These securities were issued by U.S. government agencies or government-sponsored entities and did not have any credit losses given the explicit government guarantee or other government support.

Agency residential mortgage-backed securities (“RMBS”)

The unrealized losses associated with agency RMBS were primarily driven by changes in interest rates and not due to the credit quality of the securities. These securities were issued by U.S. government agencies or government-sponsored entities and did not have any credit losses given the explicit government guarantee or other government support.

Securities of U.S. states and political subdivisions

The unrealized losses associated with securities of U.S. states and political subdivisions were primarily driven by changes in interest rates and were not due to the credit quality of the securities. Some of these securities are guaranteed by a bond insurer, but management did not rely on the guarantee in making its investment decision. These securities will continue to be monitored as part of the Company’s quarterly impairment analysis, but are expected to perform even if the rating agencies reduce the credit rating of the bond insurers. As a result, the Company expects to recover the entire amortized cost basis of these securities.

Cost-method investments

At December 31, 2014, cost-method investments with an aggregate cost of $1.6 million were not evaluated for impairment because the Company did not identify any events or changes in circumstances that may have a significant adverse effect on the fair value of these cost-method investments.

The carrying values of the Company’s investment securities could decline in the future if the financial condition of an issuer deteriorates and the Company determines it is probable that it will not recover the entire amortized cost basis for the security. As a result, there is a risk that significant other-than-temporary impairment charges may occur in the future.

Other-Than-Temporarily Impaired Securities

The following table presents a roll-forward of the credit loss component of the amortized cost of debt securities that the Company has written down for other-than-temporary impairment and the credit component of the loss is recognized in earnings (referred to as “credit-impaired” debt securities). Other-than-temporary impairments recognized in earnings for the years ended 2014, 2013, and 2012, for credit-impaired debt securities are presented as additions in two components based upon whether the current period is the first time the debt security was credit-impaired (initial credit impairment) or is not the first time the debt security was credit-impaired (subsequent credit impairments). The credit loss component is reduced if the Company sells, intends to sell, or believes it will be required to sell previously credit-impaired debt securities. Additionally, the credit loss component is reduced if the Company receives cash flows in excess of what it expected to receive over the remaining life of the credit-impaired debt security, the security matures or the security is fully written-down and deemed worthless. Changes in the credit loss component of credit-impaired debt securities were:

				Year ended December 31
(Dollars in thousands)				2014	2013	2012
Balance, beginning of period			$	—	1,257	3,276
	Additions:
		Subsequent credit impairments		—	—	130
	Reductions:
		Securities sold		—	(757)	(2,149)
		Securities fully written down and deemed worthless		—	(500)	—
Balance, end of period			$	—	—	1,257

Other-Than-Temporary Impairment

The following table presents details of the other-than-temporary impairment related to securities.

					Year ended December 31
(Dollars in thousands)					2014	2013	2012
Other-than-temporary impairment charges (included in earnings):
	Debt securities:
		Agency RMBS		$	333	—	—
		Individual issuer trust preferred securities		$	—	—	130
			Total debt securities	$	333	—	130
Total other-than-temporary impairment charges (included in earnings)				$	333	—	130
Other-than-temporary impairment on debt securities:
	Recorded as part of gross realized losses:
		Credit-related		$	—	—	130
		Securities with intent to sell			333	—	—
	Recorded directly to other comprehensive income for non-credit
		related impairment			—	—	—
Total other-than-temporary impairment on debt securities				$	333	—	130

Realized Gains and Losses
The following table presents the gross realized gains and losses on sales and other-than-temporary impairment charges
related to securities.
			Year ended December 31
(Dollars in thousands)			2014	2013	2012
Gross realized gains		$	467	745	1,005
Gross realized losses			(664)	(94)	(196)
Other-than-temporary impairment charges			(333)	—	(130)
	Realized gains, net	$	(530)	651	679