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Investment Securities
 9 Months Ended
Sep. 30, 2016
Investment Securities  
Investment Securities

Note 5 — Investment Securities

 

The following is the amortized cost and fair value of investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

    

Gross

 

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(Dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Value

 

September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$
6,851

 

$
225

 

$

 —

 

$
7,076

 

December 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$
9,314

 

$
409

 

$

 —

 

$
9,723

 

September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$
9,314

 

$
444

 

$

 —

 

$
9,758

 

 

The following is the amortized cost and fair value of investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(Dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Value

 

September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt*

 

$
62,996

 

$
20

 

$
(36)

 

$
62,980

 

State and municipal obligations

 

 
112,797

 

 
4,542

 

 
(15)

 

 
117,324

 

Mortgage-backed securities**

 

 
729,699

 

 
11,721

 

 
(143)

 

 
741,277

 

Corporate stocks

 

 
3,658

 

 
380

 

 
(245)

 

 
3,793

 

 

 

$
909,150

 

$
16,663

 

$
(439)

 

$
925,374

 

December 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt*

 

$
163,577

 

$
39

 

$
(1,109)

 

$
162,507

 

State and municipal obligations

 

 
127,293

 

 
4,185

 

 
(114)

 

 
131,364

 

Mortgage-backed securities**

 

 
710,816

 

 
4,063

 

 
(3,030)

 

 
711,849

 

Corporate stocks

 

 
3,673

 

 
440

 

 
(292)

 

 
3,821

 

 

 

$
1,005,359

 

$
8,727

 

$
(4,545)

 

$
1,009,541

 

September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt*

 

$
123,926

 

$
188

 

$
(320)

 

$
123,794

 

State and municipal obligations

 

 
130,553

 

 
3,946

 

 
(161)

 

 
134,338

 

Mortgage-backed securities**

 

 
616,341

 

 
9,170

 

 
(438)

 

 
625,073

 

Corporate stocks

 

 
3,161

 

 
411

 

 
(979)

 

 
2,593

 

 

 

$
873,981

 

$
13,715

 

$
(1,898)

 

$
885,798

 

* -  The Company’s government-sponsored entities holdings are comprised of debt securities offered by Federal Home Loan Mortgage Corporation (“FHLMC”) or Freddie Mac, Federal National Mortgage Association (“FNMA”) or Fannie Mae, FHLB, and Federal Farm Credit Banks (“FFCB”).  Also included in the Company’s government-sponsored entities are debt securities offered by the Small Business Administration (“SBA”), which have the full faith and credit backing of the United States Government.

** - All of the mortgage-backed securities are issued by government-sponsored entities; there are no private-label holdings.

 

The following is the amortized cost and fair value of other investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(Dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Value

 

September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock

 

$
7,840

 

$

—

 

$

—

 

$
7,840

 

Investment in unconsolidated subsidiaries

 

 
1,642

 

 

—

 

 

—

 

 
1,642

 

 

 

$
9,482

 

$

 —

 

$

 —

 

$
9,482

 

December 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock

 

$
7,251

 

$

—

 

$

—

 

$
7,251

 

Investment in unconsolidated subsidiaries

 

 
1,642

 

 

—

 

 

—

 

 
1,642

 

 

 

$
8,893

 

$

 —

 

$

 —

 

$
8,893

 

September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock

 

$
7,389

 

$

—

 

$

—

 

$
7,389

 

Investment in unconsolidated subsidiaries

 

 
1,642

 

 

—

 

 

—

 

 
1,642

 

 

 

$
9,031

 

$

 —

 

$

 —

 

$
9,031

 

 

The amortized cost and fair value of debt securities at September 30,  2016 by contractual maturity are detailed below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.  Corporate Stocks including equity and preferred stocks with no stated maturity are included in the due after ten years category.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities

 

Securities

 

 

 

Held to Maturity

 

Available for Sale

 

 

 

Amortized

 

Fair

 

Amortized

 

Fair

 

(Dollars in thousands)

    

Cost

    

Value

    

Cost

    

Value

 

Due in one year or less

    

$
1,928

 

$
1,969

    

$
6,804

    

$
6,861

 

Due after one year through five years

 

 
2,984

 

 
3,084

 

 
90,063

 

 
90,966

 

Due after five years through ten years

 

 
1,939

 

 
2,023

 

 
153,896

 

 
158,477

 

Due after ten years

 

 

 —

 

 

 —

 

 
658,387

 

 
669,070

 

 

 

$
6,851

 

$
7,076

 

$
909,150

 

$
925,374

 

 

Information pertaining to the Company’s securities with gross unrealized losses at September 30, 2016, December 31, 2015 and September 30,  2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Than

 

Twelve Months

 

 

 

Twelve Months

 

or More

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

 

 

Unrealized

 

Fair

 

Unrealized

 

Fair

 

(Dollars in thousands)

    

Losses

    

Value

    

Losses

    

Value

 

September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt

 

$
36

 

$
11,962

 

$

 —

 

$

 —

 

State and municipal obligations

 

 
15

 

 
1,947

 

 

 —

 

 

 —

 

Mortgage-backed securities

 

 
106

 

 
56,023

 

 
37

 

 
2,325

 

Corporate stocks

 

 

 —

 

 

 —

 

 
245

 

 
1,496

 

 

 

$
157

 

$
69,932

 

$
282

 

$
3,821

 

December 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt

 

$
717

 

$
88,224

 

$
392

 

$
17,598

 

State and municipal obligations

 

 
9

 

 
3,755

 

 
105

 

 
2,650

 

Mortgage-backed securities

 

 
2,600

 

 
347,380

 

 
430

 

 
23,772

 

Corporate stocks

 

 

 —

 

 

 —

 

 
292

 

 
1,450

 

 

 

$
3,326

 

$
439,359

 

$
1,219

 

$
45,470

 

September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt

 

$
77

 

$
14,915

 

$
243

 

$
32,732

 

State and municipal obligations

 

 
12

 

 
5,074

 

 
149

 

 
4,221

 

Mortgage-backed securities

 

 
179

 

 
32,579

 

 
259

 

 
24,555

 

Corporate stocks

 

 

 —

 

 

 —

 

 
979

 

 
1,251

 

 

 

$
268

 

$
52,568

 

$
1,630

 

$
62,759

 

 

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the financial condition and near-term prospects of the issuer, (2) the outlook for receiving the contractual cash flows of the investments, (3) the length of time and the extent to which the fair value has been less than cost, (4) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value or for a debt security whether it is more-likely-than-not that the Company will be required to sell the debt security prior to recovering its fair value, and (5) the anticipated outlook for changes in the general level of interest rates.  All debt securities available for sale in an unrealized loss position as of September 30,  2016 continue to perform as scheduled.  All equity securities available for sale in an unrealized loss position as of September 30,  2016 continue to pay dividends. As part of the Company’s evaluation of its intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers its investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position.  The Company does not currently intend to sell the securities within the portfolio and it is not more-likely-than-not that the Company will be required to sell the debt securities; therefore, management does not consider these investments to be other-than-temporarily impaired at September 30,  2016. Management continues to monitor all of these securities with a high degree of scrutiny.  There can be no assurance that the Company will not conclude in future periods that conditions existing at that time indicate some or all of these securities may be sold or are other than temporarily impaired, which would require a charge to earnings in such periods.