INVESTMENTS

12 Months Ended

Dec. 31, 2015

Note 3 – Investments

Investments available-for-sale

The amortized cost and estimated fair values of investments available-for-sale at December 31 are presented in the following table:

			2015								2014
					Gross		Gross		Estimated				Gross		Gross		Estimated
			Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
(In thousands)			Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. government agencies			$	109,602	$	132	$	(1,334)	$	108,400	$	144,497	$	-	$	(2,818)	$	141,679
State and municipal				156,402		8,305		-		164,707		157,603		9,453		(4)		167,052
Mortgage-backed				312,846		6,396		(2,546)		316,696		354,631		9,824		(2,936)		361,519
Trust preferred				1,089		-		(66)		1,023		1,348		-		(112)		1,236
	Total debt securities			579,939		14,833		(3,946)		590,826		658,079		19,277		(5,870)		671,486
Marketable equity securities				1,223		-		-		1,223		723		-		-		723
		Total investments available-for-sale	$	581,162	$	14,833	$	(3,946)	$	592,049	$	658,802	$	19,277	$	(5,870)	$	672,209

Any unrealized losses in the U.S. government agencies, state and municipal or mortgage-backed securities at December 31, 2015 are the result of changes in interest rates. These declines are considered temporary in nature and will decline over time and recover as these securities approach maturity.

The mortgage-backed portfolio at December 31, 2015 is composed entirely of either the most senior tranches of GNMA, FNMA or FHLMC collateralized mortgage obligations ($132.4 million), or GNMA, FNMA or FHLMC mortgage-backed securities ($184.3 million). The Company does not intend to sell these securities and has sufficient liquidity to hold these securities for an adequate period of time, which may be maturity, to allow for any anticipated recovery in fair value.

At December 31, 2015 the trust preferred portfolio consisted of one pooled trust preferred security. The pooled trust preferred security, which is backed by debt issued by banks and thrifts, totals $1.1 million with a fair value of $1.0 million. The fair value of this security was determined by management through the use of a third party valuation specialist due to the limited trading activity for this security.

As a result of this evaluation, it was determined that the pooled trust preferred security had not incurred any credit-related other-than-temporary impairment (“OTTI”) for the year ended December 31, 2015. Non-credit related OTTI on this security, which is not expected to be sold and which the Company has the ability to hold until maturity, was $0.1 million at December 31, 2015. This non-credit related OTTI was recognized in other comprehensive income (“OCI”) at December 31, 2015.

The following table provides the activity of OTTI on investment securities due to credit losses recognized in earnings for the period indicated:

(In thousands)		OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2013	$	531
Additions for credit losses not previously recognized		-
Cumulative credit losses on investment securities, through December 31, 2014		531
Additions for credit losses not previously recognized		-
Cumulative credit losses on investment securities, through December 31, 2015	$	531

Gross unrealized losses and fair values by length of time that the individual available-for-sale securities have been in an unrealized loss position at December 31 are presented in the following table:

		2015
						Continuous Unrealized
						Losses Existing for:
		Number								Total
		of				Less than		More than		Unrealized
(Dollars in thousands)		securities		Fair Value		12 months		12 months		Losses
U.S. government agencies			7	$	78,555	$	1,020	$	314	$	1,334
Mortgage-backed			26		140,556		716		1,830		2,546
Trust preferred			1		1,023		-		66		66
	Total		34	$	220,134	$	1,736	$	2,210	$	3,946

		2014
						Continuous Unrealized
						Losses Existing for:
		Number								Total
		of				Less than		More than		Unrealized
(Dollars in thousands)		securities		Fair Value		12 months		12 months		Losses
U.S. government agencies			14	$	141,679	$	60	$	2,758	$	2,818
State and municipal			2		1,409		4		-		4
Mortgage-backed			20		108,902		58		2,878		2,936
Trust preferred			1		1,236		-		112		112
	Total		37	$	253,226	$	122	$	5,748	$	5,870

The amortized cost and estimated fair values of debt securities available-for-sale by contractual maturity at December 31 are provided in the following table. The Company has allocated mortgage-backed securities into the four maturity groupings reflected in the following table using the expected average life of the individual securities based on statistics provided by independent third party industry sources. Expected maturities will differ from contractual maturities as borrowers may have the right to prepay obligations with or without prepayment penalties.

		2015				2014
				Estimated				Estimated
		Amortized		Fair		Amortized		Fair
(In thousands)		Cost		Value		Cost		Value
Due in one year or less		$	301	$	306	$	691	$	714
Due after one year through five years			157,710		160,257		47,900		49,385
Due after five years through ten years			168,136		174,677		332,841		340,852
Due after ten years			253,792		255,586		276,647		280,535
	Total debt securities available-for-sale	$	579,939	$	590,826	$	658,079	$	671,486

At December 31, 2015 and 2014, investments available-for-sale with a book value of $233.2 million and $212.9 million, respectively, were pledged as collateral for certain government deposits and for other purposes as required or permitted by law. The outstanding balance of no single issuer, except for U.S. government agency securities, exceeded ten percent of stockholders' equity at December 31, 2015 and 2014.

Investments held-to-maturity

The amortized cost and estimated fair values of investments held-to-maturity at December 31 are presented in the following table:

		2015								2014
				Gross		Gross		Estimated				Gross		Gross		Estimated
		Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
(In thousands)		Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. government agencies		$	56,460	$	-	$	(733)	$	55,727	$	64,512	$	-	$	(1,734)	$	62,778
State and municipal			149,537		4,297		(148)		153,686		155,261		4,321		(325)		159,257
Mortgage-backed			168		23		-		191		200		25		-		225
Corporate debt			2,100		-		-		2,100		-		-		-		-
	Total investments held-to-maturity	$	208,265	$	4,320	$	(881)	$	211,704	$	219,973	$	4,346	$	(2,059)	$	222,260

Gross unrealized losses and fair values by length of time that the individual held-to-maturity securities have been in a continuous unrealized loss position at December 31 are presented in the following tables:

		2015
						Continuous Unrealized
						Losses Existing for:
		Number								Total
		of				Less than		More than		Unrealized
(Dollars in thousands)		securities		Fair Value		12 months		12 months		Losses
U.S. government agencies			6	$	55,727	$	456	$	277	$	733
State and municipal			11		12,369		23		125		148
	Total		17	$	68,096	$	479	$	402	$	881

		2014
						Continuous Unrealized
						Losses Existing for:
		Number								Total
		of				Less than		More than		Unrealized
(Dollars in thousands)		securities		Fair Value		12 months		12 months		Losses
U.S. government agencies			8	$	62,778	$	-	$	1,734	$	1,734
State and municipal			41		32,027		18		307		325
	Total		49	$	94,805	$	18	$	2,041	$	2,059

The Company does not intend to sell these securities and has sufficient liquidity to hold these securities to maturity, to allow for any anticipated recovery in fair value, and substantiates that the unrealized losses in the held-to-maturity portfolio are considered temporary in nature.

The amortized cost and estimated fair values of debt securities held-to-maturity by contractual maturity at December 31 are reflected in the following table. Expected maturities will differ from contractual maturities as borrowers may have the right to prepay obligations with or without prepayment penalties.

		2015				2014
				Estimated				Estimated
		Amortized		Fair		Amortized		Fair
(In thousands)		Cost		Value		Cost		Value
Due in one year or less		$	845	$	853	$	1,690	$	1,694
Due after one year through five years			19,217		20,041		6,763		6,938
Due after five years through ten years			163,125		165,620		163,252		164,787
Due after ten years			25,078		25,190		48,268		48,841
	Total debt securities held-to-maturity	$	208,265	$	211,704	$	219,973	$	222,260

At December 31, 2015 and 2014, investments held-to-maturity with a book value of $194.3 million and $202.4 million, respectively, were pledged as collateral for certain government deposits and for other purposes as required or permitted by law. The outstanding balance of no single issuer, except for U.S. government agency securities, exceeded ten percent of stockholders' equity at December 31, 2015 and 2014.

Equity securities

Other equity securities at the dates indicated are presented in the following table:

(In thousands)		2015		2014
Federal Reserve Bank stock		$	8,269	$	8,269
Federal Home Loan Bank of Atlanta stock			33,067		33,168
	Total equity securities	$	41,336	$	41,437

Securities gains

Gross realized gains and losses on all investments for the years ended December 31 are presented in the following table:

(In thousands)		2015		2014		2013
Gross realized losses from sales of investments available-for-sale			-		-		(3)
Net gains or (losses) from calls of investments available-for-sale			18		2		44
Net gains or (losses) from calls of investments held-to-maturity			18		3		74
	Net securities gains	$	36	$	5	$	115