Investment Securities (Tables)

12 Months Ended

Dec. 31, 2013

The following is a summary of investment securities:

	(Amounts in thousands)
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury securities	$	107	$	5	$	—	$	112
U.S. Government agencies and corporations		9,259		—		312		8,947
Obligations of states and political subdivisions		44,575		467		1,507		43,535
U.S. Government-sponsored mortgage-backed securities		79,255		644		1,877		78,022
U.S. Government-sponsored collateralized mortgage obligations		17,120		105		140		17,085
Trust preferred securities		11,854		—		1,718		10,136
Total debt securities		162,170		1,221		5,554		157,837
Federal Home Loan Bank (FHLB) stock		2,823		—		—		2,823
Federal Reserve Bank (FRB) stock		226		—		—		226
Total regulatory stock		3,049		—		—		3,049
Total investment securities available-for-sale	$	165,219	$	1,221	$	5,554	$	160,886

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury securities	$	113	$	10	$	—	$	123
U.S. Government agencies and corporations		8,038		27		—		8,065
Obligations of states and political subdivisions		40,374		1,973		31		42,316
U.S. Government-sponsored mortgage-backed securities		90,858		2,071		590		92,339
U.S. Government-sponsored collateralized mortgage obligations		30,917		300		75		31,142
Trust preferred securities		13,883		—		6,271		7,612
Total debt securities		184,183		4,381		6,967		181,597
Federal Home Loan Bank (FHLB) stock		2,823		—		—		2,823
Federal Reserve Bank (FRB) stock		226		—		—		226
Total regulatory stock		3,049		—		—		3,049
Total investment securities available-for-sale	$	187,232	$	4,381	$	6,967	$	184,646

Amortized Cost and Fair Value of Debt Securities by Contractual Maturity

The amortized cost and fair value of debt securities at December 31, 2013, by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	(Amounts in thousands)
	Amortized Cost		Fair Value
Due in one year or less	$	130	$	133
Due after one year through five years		3,520		3,566
Due after five years through ten years		14,880		14,660
Due after ten years		47,265		44,371
Total		65,795		62,730
U.S. Government-sponsored mortgage-backed and related securities		96,375		95,107
Total debt securities	$	162,170	$	157,837

Proceeds, Gains and Losses Realized on Securities Sold or Called

The following table sets forth the proceeds, gains and losses realized on securities sold or called for each of the years ended December 31:

	(Amounts in thousands)
	2013		2012		2011
Proceeds on securities sold	$	29,338	$	24,796	$	14,458
Gross realized gains		658		1,168		562
Gross realized losses		123		1,188		33
Proceeds on securities called	$	7,153	$	2,537	$	1,939
Gross realized gains		—		8		9
Gross realized losses		—		4		—
Exchange on General Motors securities:
Gross realized gains	$	—	$	30	$	344

Fair Value of Securities with Unrealized Losses and an Aging of those Unrealized Losses

The following is a summary of the fair value of securities with unrealized losses and an aging of those unrealized losses at December 31, 2013:

	(Amounts in thousands)
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies and corporations	$	7,144	$	129	$	1,803	$	183	$	8,947	$	312
Obligations of states and political subdivisions		19,785		1,142		1,883		365		21,668		1,507
U.S. Government-sponsored mortgage-backed securities		34,424		1,044		29,922		833		64,346		1,877
U.S. Government-sponsored collateralized mortgage obligations		6,575		126		2,095		14		8,670		140
Trust preferred securities		—		—		1,633		1,718		1,633		1,718
Total	$	67,928	$	2,441	$	37,336	$	3,113	$	105,264	$	5,554

The above table represents 83 investment securities where the fair value is less than the related amortized cost.

The following is a summary of the fair value of securities with unrealized losses and an aging of those unrealized losses at December 31, 2012:

	(Amounts in thousands)
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of states and political subdivisions	$	4,176	$	31	$	—	$	—	$	4,176	$	31
U.S. Government-sponsored mortgage-backed securities		—		—		47,358		590		47,358		590
U.S. Government-sponsored collateralized mortgage obligations		—		—		4,825		75		4,825		75
Trust preferred securities		—		—		7,612		6,271		7,612		6,271
Total	$	4,176	$	31	$	59,795	$	6,936	$	63,971	$	6,967

Summary of Net Impairment Losses in Earnings and Impairment Losses Recognized in Other Comprehensive Income

The Company records impairment credit losses in earnings (before tax) and non-credit impairment losses in other comprehensive income (loss) (before tax) as indicated in the following table:

	(Amounts in thousands)
	December 31,
	2013		2012		2011
Trust preferred securities:
Net impairment losses recognized in earnings (before tax)	$	1,954	$	171	$	202
Impairment gains recognized in other comprehensive income (before tax)	$	3,595	$	136	$	61

Other than Temporary Impairment Credit Losses Recognized in Earnings

The following provides a cumulative roll forward of credit losses recognized in earnings for trust preferred securities held for the years ended:

	(Amounts in thousands)
	December 31,
	2013		2012			2011
Beginning balance	$	351	$	10,674		$	10,472
Reduction for debt securities for which other-than-temporary impairment has been previously recognized and there is no related other comprehensive income		—		—			—
Credit losses on debt securities for which other-than-temporary impairment has not been previously recognized		1,954		—			—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized		—		171			202
Sale of debt securities		—		(10,494	)		—
Ending balance	$	2,305	$	351		$	10,674

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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