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Investment Securities
 3 Months Ended
Mar. 31, 2017
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

 

March 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

6,095

 

$

122

 

$

 —

 

$

6,217

 

December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

6,094

 

$

156

 

$

 —

 

$

6,250

 

March 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

7,920

 

$

360

 

$

 —

 

$

8,280

 

 

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

 

March 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt*

 

$

93,995

 

$

25

 

$

(721)

 

$

93,299

 

State and municipal obligations

 

 

196,241

 

 

4,183

 

 

(140)

 

 

200,284

 

Mortgage-backed securities**

 

 

1,084,764

 

 

5,095

 

 

(6,420)

 

 

1,083,439

 

Corporate stocks

 

 

3,658

 

 

624

 

 

(291)

 

 

3,991

 

 

 

$

1,378,658

 

$

9,927

 

$

(7,572)

 

$

1,381,013

 

December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt*

 

$

85,488

 

$

 —

 

$

(846)

 

$

84,642

 

State and municipal obligations

 

 

105,303

 

 

2,289

 

 

(190)

 

 

107,402

 

Mortgage-backed securities**

 

 

807,717

 

 

3,085

 

 

(7,225)

 

 

803,577

 

Corporate stocks

 

 

3,658

 

 

473

 

 

(347)

 

 

3,784

 

 

 

$

1,002,166

 

$

5,847

 

$

(8,608)

 

$

999,405

 

March 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt*

 

$

126,360

 

$

96

 

$

(143)

 

$

126,313

 

State and municipal obligations

 

 

123,399

 

 

4,822

 

 

(78)

 

 

128,143

 

Mortgage-backed securities**

 

 

708,650

 

 

11,291

 

 

(111)

 

 

719,830

 

Corporate stocks

 

 

3,658

 

 

284

 

 

(181)

 

 

3,761

 

 

 

$

962,067

 

$

16,493

 

$

(513)

 

$

978,047

 

* -  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

 

March 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock

 

$

11,239

 

$

—

 

$

—

 

$

11,239

 

Investment in unconsolidated subsidiaries

 

 

2,262

 

 

—

 

 

—

 

 

2,262

 

 

 

$

13,501

 

$

 —

 

$

 —

 

$

13,501

 

December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock

 

$

7,840

 

$

—

 

$

—

 

$

7,840

 

Investment in unconsolidated subsidiaries

 

 

1,642

 

 

—

 

 

—

 

 

1,642

 

 

 

$

9,482

 

$

 —

 

$

 —

 

$

9,482

 

March 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock

 

$

7,897

 

$

—

 

$

—

 

$

7,897

 

Investment in unconsolidated subsidiaries

 

 

1,642

 

 

—

 

 

—

 

 

1,642

 

 

 

$

9,539

 

$

 —

 

$

 —

 

$

9,539

 

 

The amortized cost and fair value of debt securities at March 31,  2017 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

    

$

3,379

 

$

3,423

    

$

11,395

    

$

11,467

 

Due after one year through five years

 

 

1,928

 

 

1,996

 

 

130,863

 

 

131,582

 

Due after five years through ten years

 

 

788

 

 

798

 

 

253,665

 

 

255,714

 

Due after ten years

 

 

 —

 

 

 —

 

 

982,735

 

 

982,250

 

 

 

$

6,095

 

$

6,217

 

$

1,378,658

 

$

1,381,013

 

 

Information pertaining to the Company’s securities with gross unrealized losses at March 31, 2017, December 31, 2016 and March 31,  2016, 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

 

March 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt

 

$

721

 

$

87,609

 

$

 —

 

$

 —

 

State and municipal obligations

 

 

140

 

 

10,984

 

 

 —

 

 

 —

 

Mortgage-backed securities

 

 

6,349

 

 

601,953

 

 

71

 

 

1,940

 

Corporate stocks

 

 

 —

 

 

 —

 

 

291

 

 

1,451

 

 

 

$

7,210

 

$

700,546

 

$

362

 

$

3,391

 

December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt

 

$

846

 

$

84,642

 

$

 —

 

$

 —

 

State and municipal obligations

 

 

190

 

 

11,506

 

 

 —

 

 

 —

 

Mortgage-backed securities

 

 

7,148

 

 

592,228

 

 

77

 

 

2,058

 

Corporate stocks

 

 

 —

 

 

 —

 

 

347

 

 

1,395

 

 

 

$

8,184

 

$

688,376

 

$

424

 

$

3,453

 

March 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored entities debt

 

$

108

 

$

36,611

 

$

35

 

$

9,956

 

State and municipal obligations

 

 

16

 

 

1,271

 

 

62

 

 

1,038

 

Mortgage-backed securities

 

 

23

 

 

15,480

 

 

88

 

 

8,575

 

Corporate stocks

 

 

 —

 

 

 —

 

 

181

 

 

1,562

 

 

 

$

147

 

$

53,362

 

$

366

 

$

21,131

 

 

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 March 31, 2017 continue to perform as scheduled.  All equity securities available for sale in an unrealized loss position as of March 31,  2017 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 March 31,  2017. 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.