Note 2 - Securities

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

(2) Securities

The amortized cost, unrealized gains and losses, and fair value of securities available-for-sale follow:

(in thousands)	Amortized		Unrealized				Fair
September 30, 2015	cost		Gains		Losses		value
U.S. Treasury and other U.S. Government obligations	$	100,000	$	-	$	-	$	100,000
Government sponsored enterprise obligations		184,258		2,746		194		186,810
Mortgage-backed securities - government agencies		152,552		2,564		769		154,347
Obligations of states and political subdivisions		61,067		1,482		41		62,508
Corporate equity securities		756		-		55		701
Total securities available for sale	$	498,633	$	6,792	$	1,059	$	504,366
December 31, 2014
U.S. Treasury and other U.S. Government obligations	$	70,000	$	-	$	-	$	70,000
Government sponsored enterprise obligations		203,531		2,017		562		204,986
Mortgage-backed securities - government agencies		173,573		2,042		1,345		174,270
Obligations of states and political subdivisions		61,416		1,560		142		62,834
Corporate equity securities		756		210		-		966
Total securities available for sale	$	509,276	$	5,829	$	2,049	$	513,056

Corporate equity securities consist of common stock in a publicly-traded business development company.

There were no securities classified as held to maturity as of September 30, 2015 or December 31, 2014.

In the first quarter of 2015, Bancorp sold securities with total fair market value of $5.9 million, generating no gain or loss. These securities consisted of agency and mortgage-backed securities with small remaining balances and agency securities. In 2014, Bancorp sold securities with total fair market value of $7.7 million, generating a net loss of $9 thousand. These securities consisted of mortgage-backed securities with small remaining balances, obligations of state and political subdivisions, and agency securities. These sales were made in the ordinary course of portfolio management. Management has the intent and ability to hold all remaining investment securities available-for-sale for the foreseeable future.

A summary of the available-for-sale investment securities by contractual maturity groupings as of September 30, 2015 is shown below.

(in thousands)
Securities available-for-sale		Amortized cost		Fair value
Due within 1 year	$	125,176	$	125,348
Due after 1 but within 5 years		114,928		117,100
Due after 5 but within 10 years		15,694		15,992
Due after 10 years		89,527		90,878
Mortgage-backed securities		152,552		154,347
Corporate equity securities		756		701
Total securities available-for-sale	$	498,633	$	504,366

Actual maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations. In addition to equity securities, the investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as the FHLMC, FNMA, and GNMA. These securities differ from traditional debt securities primarily in that they may have uncertain principal payment dates and are priced based on estimated prepayment rates on the underlying collateral.

Securities with a carrying value of approximately $278.1 million at September 30, 2015 and $263.1 million at December 31, 2014 were pledged to secure accounts of commercial depositors in cash management accounts, public deposits, and cash balances for certain investment management and trust accounts.

Securities with unrealized losses at September 30, 2015 and December 31, 2014, not recognized in the statements of income are as follows:

(in thousands)	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2015	value		losses		value		losses		value		losses
Government sponsored enterprise obligations	$	6,353	$	8	$	8,740	$	186	$	15,093	$	194
Mortgage-backed securities - government agencies		12,929		129		31,734		640		44,663		769
Obligations of states and political subdivisions		7,817		25		2,232		16		10,049		41
Corporate equity securities		701		55		-		-		701		55
Total temporarily impaired securities	$	27,800	$	217	$	42,706	$	842	$	70,506	$	1,059
December 31, 2014
Government sponsored enterprise obligations	$	36,979	$	30	$	26,848	$	532	$	63,827	$	562
Mortgage-backed securities - government agencies		4,038		77		49,325		1,268		53,363		1,345
Obligations of states and political subdivisions		12,655		67		6,297		75		18,952		142
Total temporarily impaired securities	$	53,672	$	174	$	82,470	$	1,875	$	136,142	$	2,049

Applicable dates for determining when securities are in an unrealized loss position are September 30, 2015 and December 31, 2014. As such, it is possible that a security had a market value lower than its amortized cost on other days during the past twelve months, but is not in the “Investments with an Unrealized Loss of less than 12 months” category above.

Unrealized losses on Bancorp’s investment securities portfolio have not been recognized as an expense because the securities are of high credit quality, and the decline in fair values is due to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach their maturity date and/or the interest rate environment returns to conditions similar to when these securities were purchased. These investments consist of 45 and 80 separate investment positions as of September 30, 2015 and December 31, 2014, respectively. Because management does not intend to sell the investments, and it is not likely that Bancorp will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, Bancorp does not consider these securities to be other-than-temporarily impaired at September 30, 2015.

FHLB stock and other securities are investments held by Bancorp which are not readily marketable and are carried at cost. This category includes holdings of Federal Home Loan Bank of Cincinnati (FHLB) stock which are required for access to FHLB borrowing, and are classified as restricted securities.