Investment Securities

12 Months Ended

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities Disclosure [Text Block]

Investment securities

Investment securities at December 31, 2013 and 2012 consisted of the following (dollars in thousands):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
2013
Available-for-sale
U.S. Agency mortgage-backed securities (MBS) *	$	171,853	$	3,125	$	(3,646	)	$	171,332
Non-agency MBS	13,500		11		(414		)	13,097
U.S. Agency asset-backed securities	8,683		887		(21		)	9,549
Mutual fund	502		1		—			503
	$	194,538	$	4,024	$	(4,081	)	$	194,481
Held-to-maturity
Tax credit investments	$	614	$	—	$	—		$	614
Obligations of state and political subdivisions	706		22		—			728
	$	1,320	$	22	$	—		$	1,342
2012
Available-for-sale
U.S. Agency MBS *	$	216,141	$	5,426	$	(252	)	$	221,315
Non-agency MBS	20,601		253		—			20,854
U.S. Agency asset-backed securities	9,374		599		(118		)	9,855
Commercial paper	5,000		—		—			5,000
Mutual fund	486		34		—			520
	$	251,602	$	6,312	$	(370	)	$	257,544
Held-to-maturity
Tax credit investments	$	790	$	—	$	—		$	790
Obligations of state and political subdivisions	1,023		50		—			1,073
	$	1,813	$	50	$	—		$	1,863

* U.S. Agency MBS include private label MBS of approximately $11.3 million and $14.4 million at December 31, 2013 and 2012, respectively, which are supported by FHA/VA collateral.

The following table presents the fair value and gross unrealized losses of the Bank’s investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2013 and 2012 (dollars in thousands):

	Less than 12 months					12 months or more					Total
	Estimated  fair value		Unrealized losses			Estimated  fair value		Unrealized losses			Estimated  fair value		Unrealized losses
2013
U.S. Agency MBS	$	35,440	$	(810	)	$	30,779	$	(2,836	)	$	66,219	$	(3,646	)
Non-Agency MBS	9,569		(412		)	179		(2		)	9,748		(414		)
U.S. Agency asset-backed securities	703		(4		)	1,775		(17		)	2,478		(21		)
	$	45,712	$	(1,226	)	$	32,733	$	(2,855	)	$	78,445	$	(4,081	)
2012
U.S. Agency MBS	$	34,114	$	(43	)	$	12,718	$	(209	)	$	46,832	$	(252	)
U.S. Agency asset-backed securities	—		—			2,750		(118		)	2,750		(118		)
	$	34,114	$	(43	)	$	15,468	$	(327	)	$	49,582	$	(370	)

The unrealized losses on investments in U.S. Agency and non-agency MBS and U.S Agency asset-backed securities are primarily due to elevated yield/rate spreads at December 31, 2013 and 2012 as compared to yield/rate relationships prevailing at the time specific investment securities were purchased. Management expects the fair value of these investment securities to recover as market volatility lessens and/or as securities approach their maturity dates. Accordingly, management does not believe that the above gross unrealized losses on investment securities are other-than-temporary. No impairment adjustments have been recorded for the years ended December 31, 2013, 2012 and 2011.

Management intends to hold the investment securities classified as held-to-maturity until they mature, at which time the Company will receive full amortized cost value for such investment securities. Furthermore, as of December 31, 2013, management did not have the intent to sell any of the securities classified as available-for-sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

The amortized cost and estimated fair value of investment securities at December 31, 2013, by contractual maturity, are shown below (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale				Held-to-maturity
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
Due in one year or less	$	—	$	—	$	510	$	521
Due after one year through five years	74		76		196		207
Due after five years through ten years	47,214		44,081		—		—
Due after ten years	146,748		149,821		—		—
Mutual fund	502		503		—		—
Tax credit investments	—		—		614		614
	$	194,538	$	194,481	$	1,320	$	1,342

Investment securities with an estimated fair value of approximately $171.1 million and $124.0 million at December 31, 2013 and 2012, respectively, were pledged or in the process of being pledged, to secure various borrowings and for other purposes as required or permitted by law.

The Company sold $0.4 million of investment securities during the year ended December 31, 2013 and no securities during the years ended December 31,2012 and 2011.