Securities

6 Months Ended

Jun. 30, 2018

Investments debt and equity securities [Abstract]

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

NOTE 3: SECURITIES

At June 30, 2018 and December 31, 2017, respectively, all securities within the scope of Accounting Standards Codification (“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 maturity at June 30, 2018 and December 31, 2017, 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
June 30, 2018
Agency obligations (a)		$	4,474	24,482	22,405	—	51,361	—	1,672	$	53,033
Agency RMBS (a)			—	—	9,617	119,389	129,006	80	4,337		133,263
State and political subdivisions			—	3,406	8,338	59,209	70,953	754	754		70,953
	Total available-for-sale	$	4,474	27,888	40,360	178,598	251,320	834	6,763	$	257,249

December 31, 2017
Agency obligations (a)		$	—	29,253	23,809	—	53,062	79	904	$	53,887
Agency RMBS (a)			—	—	11,201	121,871	133,072	330	1,639		134,381
State and political subdivisions			—	2,564	9,999	59,000	71,563	1,616	237		70,184
	Total available-for-sale	$	—	31,817	45,009	180,871	257,697	2,025	2,780	$	258,452
(a) Includes securities issued by U.S. government agencies or government sponsored entities.

Securities with aggregate fair values of $144.5 million and $149.4 million at June 30, 2018 and December 31, 2017, 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 are non-marketable equity securities, such as FHLB of Atlanta stock and Federal Reserve Bank (“FRB”) stock. The carrying amounts of non-marketable equity securities were $1.4 million at June 30, 2018 and December 31, 2017, respectively.

Gross Unrealized Losses and Fair Value

The fair values and gross unrealized losses on securities at June 30, 2018 and December 31, 2017, respectively, segregated by those securities that have been in an unrealized loss position for less than 12 months and 12 months or longer, 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
June 30, 2018:
Agency obligations		$	31,523	437	19,838	1,235	$	51,361	1,672
Agency RMBS			55,415	1,360	65,608	2,977		121,023	4,337
State and political subdivisions			14,879	302	9,867	452		24,746	754
	Total	$	101,817	2,099	95,313	4,664	$	197,130	6,763


December 31, 2017:
Agency obligations		$	14,381	99	20,353	805	$	34,734	904
Agency RMBS			53,440	363	50,729	1,276		104,169	1,639
State and political subdivisions			2,009	22	10,155	215		12,164	237
	Total	$	69,830	484	81,237	2,296	$	151,067	2,780

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. On a quarterly basis, 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.

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 RMBS

The unrealized losses associated with agency residential mortgage-backed securities (“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.

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 other-than-temporary impairment charges may occur in the future.

Other-Than-Temporarily Impaired Securities

Credit-impaired debt securities are debt securities where the Company has written down the amortized cost basis of a security for other-than-temporary impairment and the credit component of the loss is recognized in earnings. At June 30, 2018 and December 31, 2017, the Company had no credit-impaired debt securities and there were no additions or reductions in the credit loss component of credit-impaired debt securities during the six months ended June 30, 2018 and 2017, respectively.

Realized Gains and Losses

The following table presents the gross realized gains and losses on sales of securities.


			Quarter ended June 30,			Six Months ended June 30,
(Dollars in thousands)			2018	2017		2018	2017
Gross realized gains		$	—	—	$	—	2
	Realized gains, net	$	—	—	$	—	2