Note 2 - Securities

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

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
June 30, 2017	cost		Gains		Losses		value
Government sponsored enterprise obligations	$	366,762	$	789	$	873	$	366,678
Mortgage-backed securities - government agencies		155,933		709		1,768		154,874
Obligations of states and political subdivisions		53,428		710		102		54,036
Corporate equity securities		653		50		-		703
Total securities available for sale	$	576,776	$	2,258	$	2,743	$	576,291
December 31, 2016
U.S. Treasury and other U.S. Government obligations	$	74,997	$	1	$	-	$	74,998
Government sponsored enterprise obligations		268,784		800		1,494		268,090
Mortgage-backed securities - government agencies		170,344		735		2,236		168,843
Obligations of states and political subdivisions		57,158		682		396		57,444
Corporate equity securities		653		46		-		699
Total securities available for sale	$	571,936	$	2,264	$	4,126	$	570,074

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

June 30, 2017

or

December 31, 2016.

Bancorp sold

no

securities during the

three

or

six

month periods ending

June 30, 2016

or

2017.

A summary of the available-for-sale investment securities by contractual maturity groupings as of

June 30, 2017

is shown below.

(in thousands)
Securities available-for-sale	Amortized cost		Fair value
Due within 1 year	$	222,639	$	222,690
Due after 1 but within 5 years		80,328		80,586
Due after 5 but within 10 years		15,689		15,626
Due after 10 years		101,534		101,812
Mortgage-backed securities – government agencies		155,933		154,874
Corporate equity securities		653		703
Total securities available-for-sale	$	576,776	$	576,291

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 underlying collateral.

Bancorp pledges portions of its investment securities portfolio to secure public fund deposits, cash balances of certain wealth management and trust accounts, and securities sold under agreements to repurchase. The carrying value of these pledged securities was approximately

$314.2

million at

June 30, 2017

and

$380.4

million at

December 31, 2016.

Securities with unrealized losses at

June 30, 2017

and

December 31, 2016,

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
June 30, 2017	value		losses		value		losses		value		losses
Government sponsored enterprise obligations	$	185,503	$	663	$	37,819	$	210	$	223,322	$	873
Mortgage-backed securities - government agencies		87,161		1,383		9,952		385		97,113		1,768
Obligations of states and political subdivisions		12,948		68		2,853		34		15,801		102
Total temporarily impaired securities	$	285,612	$	2,114	$	50,624	$	629	$	336,236	$	2,743
December 31, 2016
Government sponsored enterprise obligations	$	154,951	$	1,344	$	3,485	$	150	$	158,436	$	1,494
Mortgage-backed securities - government agencies		115,374		1,873		9,914		363		125,288		2,236
Obligations of states and political subdivisions		29,893		380		1,478		16		31,371		396
Total temporarily impaired securities	$	300,218	$	3,597	$	14,877	$	529	$	315,095	$	4,126

Applicable dates for determining when securities are in an unrealized loss position are

June 30, 2017

and

December 31, 2016.

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. 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

June 30, 2017.

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.