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Investment Securities
 6 Months Ended
Jun. 30, 2014
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
 
Investment securities at June 30, 2014 and December 31, 2013 consisted of the following (dollars in thousands):
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair value
June 30, 2014
 

 
 

 
 

 
 

Available-for-sale
 

 
 

 
 

 
 

U.S. Agency mortgage-backed securities (MBS) *
$
244,996

 
$
3,870

 
$
(1,782
)
 
$
247,084

Non-agency MBS
12,309

 
64

 
(287
)
 
12,086

U.S. Agency asset-backed securities
8,424

 
863

 
(42
)
 
9,245

Corporate securities
6,466

 
696

 
—

 
7,162

Mutual fund
508

 
11

 
—

 
519

 
$
272,703

 
$
5,504

 
$
(2,111
)
 
$
276,096

Held-to-maturity
 

 
 

 
 

 
 

U.S. Agency mortgage-backed securities (MBS)
$
111,893

 
$
616

 
$
(21
)
 
$
112,488

Obligations of state and political subdivisions
42,239

 
189

 
(66
)
 
42,362

Tax credit investments
585

 
—

 
—

 
585

 
$
154,717

 
$
805

 
$
(87
)
 
$
155,435

 
 
 
 
 
 
 
 
December 31, 2013
 

 
 

 
 

 
 

Available-for-sale
 

 
 

 
 

 
 

U.S. Agency 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
 

 
 

 
 

 
 

Obligations of state and political subdivisions
$
706

 
$
22

 
$
—

 
$
728

Tax credit investments
614

 
—

 
—

 
614

 
$
1,320

 
$
22

 
$
—

 
$
1,342

 
* U.S. Agency MBS include private label MBS of approximately $10.4 million and $11.3 million at June 30, 2014 and December 31, 2013, respectively, which are supported by FHA/VA collateral.
  
The following table presents the contractual maturities of investment securities at June 30, 2014 (dollars in thousands):
 
 
Available-for-sale
 
Held-to-maturity
 
Amortized
cost
 
Estimated
fair value
 
Amortized
cost
 
Estimated
fair value
Due in one year or less
$
3,238

 
$
3,240

 
$
184

 
$
187

Due after one year through five years
5,245

 
5,258

 
10,536

 
10,542

Due after five years through ten years
76,423

 
75,050

 
112,082

 
112,683

Due after ten years
187,289

 
192,029

 
31,330

 
31,438

Mutual fund
508

 
519

 
—

 
—

Tax credit investments
—

 
—

 
585

 
585

 
$
272,703

 
$
276,096

 
$
154,717

 
$
155,435

 
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 June 30, 2014 and December 31, 2013 (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
June 30, 2014
 


 


 


 


 


 

Available-for-sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Agency MBS
$
9,217


$
(13
)

$
45,895


$
(1,769
)

$
55,112


$
(1,782
)
Non-Agency MBS
1,222


(87
)

5,639


(200
)

6,861


(287
)
U.S. Agency asset-backed securities
760


(2
)

1,644


(40
)

2,404


(42
)
 
$
11,199


$
(102
)

$
53,178


$
(2,009
)

$
64,377


$
(2,111
)


















Held-to-maturity
 
 
 
 
 
 
 
 
 
 
 
U.S. Agency MBS
$
15,384

 
$
(21
)
 
—

 
—

 
$
15,384

 
$
(21
)
Obligations of state and political subdivisions
12,620

 
(66
)
 
—

 
—

 
12,620

 
(66
)
 
$
28,004

 
$
(87
)
 
$
—

 
$
—

 
$
28,004

 
$
(87
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 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
)

 
The unrealized losses on investments in U.S. Agency and non-agency MBS and U.S Agency asset-backed securities are primarily due to changes in market yield/rate spreads at June 30, 2014 and December 31, 2013 as compared to yield/rate spread relationships prevailing at the time specific investment securities were purchased. Management expects the fair value of these investment securities to recover as securities approach their maturity dates. Management does not believe that the above gross unrealized losses on investment securities are other-than-temporary. Accordingly, no impairment adjustments have been recorded.
 
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 June 30, 2014, management did not have the intent to sell any of the securities classified as held-to-maturity 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.