Investment Securities (Tables)

9 Months Ended

Sep. 30, 2014

A summary of the amortized cost and market value of securities available for sale and securities held to maturity at September 30, 2014 and December 31, 2013 is as follows:

	At September 30, 2014
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	83,145	$	326	$	(346	)	$	83,125
Mortgage-backed securities		12,832		611		(56	)		13,387
Municipal securities		12,246		348		(41	)		12,553
Corporate bonds		26,908		818		-			27,726
Asset-backed securities		18,532		204		-			18,736
Trust preferred securities		5,261		-		(2,082	)		3,179
Other securities		115		9		-			124
Total securities available for sale	$	159,039	$	2,316	$	(2,525	)	$	158,830

U.S. Government agencies	$	1	$	-	$	-		$	1
Collateralized mortgage obligations		68,970		123		(468	)		68,625
Other securities		20		-		-			20
Total securities held to maturity	$	68,991	$	123	$	(468	)	$	68,646

	At December 31, 2013
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	127,242	$	665	$	(4,467	)	$	123,440
Mortgage-backed securities		15,669		623		(111	)		16,181
Municipal securities		9,737		68		(162	)		9,643
Corporate bonds		32,174		1,079		-			33,253
Asset-backed securities		19,089		318		-			19,407
Trust preferred securities		5,277		-		(2,427	)		2,850
Other securities		115		2		-			117
Total securities available for sale	$	209,303	$	2,755	$	(7,167	)	$	204,891

U.S. Government agencies	$	1	$	-	$	-		$	1
Other securities		20		-		-			20
Total securities held to maturity	$	21	$	-	$	-		$	21

Investments Classified by Contractual Maturity Date

The maturity distribution of the amortized cost and estimated market value of investment securities by contractual maturity at September 30, 2014 is as follows:

	Available for Sale				Held to Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	14,979	$	15,211	$	-	$	-
After 1 year to 5 years		63,314		63,848		41,733		41,676
After 5 years to 10 years		69,020		67,598		27,258		26,970
After 10 years		11,726		12,173		-		-
Total	$	159,039	$	158,830	$	68,991	$	68,646

Schedule of Credit-Related Impairment Losses on Securities

The following table presents a roll-forward of the balance of credit-related impairment losses on securities held at September 30, 2014 and 2013 for which a portion of OTTI was recognized in other comprehensive income:

(dollars in thousands)	2014		2013

Beginning Balance, January 1st	$	3,959	$	3,959
Additional credit-related impairment loss on securities for which an
other-than-temporary impairment was previously recognized		7		-
Reductions for securities paid off during the period		-		-
Reductions for securities for which the amount previously recognized in other
comprehensive income was recognized in earnings because the Company
intends to sell the security		-		-
Ending Balance, September 30th	$	3,966	$	3,959

Schedule of Unrealized Loss on Investments

The following tables show the fair value and gross unrealized losses associated with the investment portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	At September 30, 2014
	Less than 12 months						12 months or more						Total
(dollars in thousands)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value		Unrealized Losses
Collateralized mortgage obligations		$	50,551		$	480		$	30,221		$	334	$	80,772		$	814
Mortgage-backed securities			1,461			9			1,075			47		2,536			56
Municipal securities			-			-			1,384			41		1,384			41
Trust preferred securities			-			-			3,179			2,082		3,179			2,082
Total		$	52,012		$	489		$	35,859		$	2,504	$	87,871		$	2,993

	At December 31, 2013
	Less than 12 months						12 months or more						Total
(dollars in thousands)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value		Unrealized Losses
Collateralized mortgage obligations		$	73,137		$	3,923		$	8,697		$	544	$	81,834	$	4,467
Mortgage-backed securities			1,450			41			1,123			70		2,573		111
Municipal Securities			5,108			162			-			-		5,108		162
Trust preferred securities			-			-			2,850			2,427		2,850		2,427
Total		$	79,695		$	4,126		$	12,670		$	3,041	$	92,365	$	7,167

Schedule of Trust Preferred Securities

The following table provides additional detail about trust preferred securities held in the portfolio as of September 30, 2014.

(dollars in thousands)	Class / Tranche	Amortized Cost		Fair Value		Unrealized Losses			Lowest Credit Rating Assigned		Number of Banks Currently Performing		Deferrals / Defaults as % of Current Balance			Conditional Default Rates for 2014 and beyond			Cumulative OTTI Life to Date
Preferred Term Securities IV	Mezzanine Notes	$	49	$	40	$	(9	)		B1		6		18	%		0.31	%	$	-
Preferred Term Securities VII	Mezzanine Notes		979		809		(170	)		D		11		54			0.35			2,173
TPREF Funding II	Class B Notes		732		379		(353	)		C		17		41			0.35			267
TPREF Funding III	Class B2 Notes		1,521		775		(746	)		C		15		36			0.27			480
Trapeza CDO I, LLC	Class C1 Notes		556		324		(232	)		C		8		49			0.30			470
ALESCO Preferred Funding IV	Class B1 Notes		604		414		(190	)		C		40		8			0.32			396
ALESCO Preferred Funding V	Class C1 Notes		820		438		(382	)		C		41		15			0.33			180
Total		$	5,261		3,179	$	(2,082	)				138		30	%				$	3,966

- 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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