INVESTMENTS

12 Months Ended

Dec. 31, 2017

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:

			2017								2016
					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			$	109,349	$	-	$	(2,781)	$	106,568	$	124,314	$	32	$	(2,556)	$	121,790
State and municipal				306,109		6,313		(169)		312,253		281,090		7,180		(586)		287,684
Mortgage-backed				302,664		1,585		(4,209)		300,040		314,029		2,851		(4,169)		312,711
Corporate debt				9,100		332		-		9,432		9,100		34		-		9,134
Trust preferred				931		71		-		1,002		1,089		-		(77)		1,012
	Total debt securities			728,153		8,301		(7,159)		729,295		729,622		10,097		(7,388)		732,331
Marketable equity securities				212		-		-		212		1,223		-		-		1,223
		Total investments available-for-sale	$	728,365	$	8,301	$	(7,159)	$	729,507	$	730,845	$	10,097	$	(7,388)	$	733,554

Any unrealized losses in the U.S. government agencies, state and municipal or mortgage-backed securities at December 31, 2017 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, 2017 is composed entirely of either the most senior tranches of GNMA, FNMA or FHLMC collateralized mortgage obligations ($102.6 million), or GNMA, FNMA or FHLMC mortgage-backed securities ($197.5 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, 2017 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 $0.9 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, 2017. The unrealized gain on this security that is recognized in other comprehensive income (“OCI”) and is not expected to be sold and which the Company has the ability to hold until maturity, was $0.1 million at December 31, 2017.

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, 2015	$	531
Additions for credit losses not previously recognized		-
Cumulative credit losses on investment securities, through December 31, 2016		531
Additions for credit losses not previously recognized		-
Cumulative credit losses on investment securities, through December 31, 2017	$	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:

		2017
						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			13	$	106,568	$	545	$	2,236	$	2,781
State and municipal			20		18,228		107		62		169
Mortgage-backed			46		221,621		402		3,807		4,209
	Total		79	$	346,417	$	1,054	$	6,105	$	7,159

		2016
						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			12	$	96,788	$	2,556	$	-	$	2,556
State and municipal			53		48,010		516		70		586
Mortgage-backed			37		212,844		3,971		198		4,169
Trust preferred			1		1,012		-		77		77
	Total		103	$	358,654	$	7,043	$	345	$	7,388

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.

		2017				2016
				Estimated				Estimated
		Amortized		Fair		Amortized		Fair
(In thousands)		Cost		Value		Cost		Value
Due in one year or less		$	12,789	$	12,889	$	7,493	$	7,541
Due after one year through five years			180,109		184,264		156,953		162,233
Due after five years through ten years			228,484		227,688		282,468		282,713
Due after ten years			306,771		304,454		282,708		279,844
	Total debt securities available-for-sale	$	728,153	$	729,295	$	729,622	$	732,331

At December 31, 2017 and 2016, investments available-for-sale with a book value of $431.7 million and $453.0 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, 2017 and 2016.

Equity securities

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

(In thousands)		2017		2016
Federal Reserve Bank stock		$	8,398	$	8,334
Federal Home Loan Bank of Atlanta stock			37,120		37,760
	Total equity securities	$	45,518	$	46,094

Securities gains

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

(In thousands)		2017		2016		2015
Gross realized gains from sales of investments available-for-sale		$	-	$	1,491	$	-
Net gains from calls of investments available-for-sale			32		440		18
Net gains from calls of investments held-to-maturity			-		1		18
Gross realized gains from sales of equity securities			1,241		-		-
	Net securities gains	$	1,273	$	1,932	$	36