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Investment Securities
 6 Months Ended
Jun. 30, 2017
Investment Securities [Abstract]  
Investment Securities



NOTE 2:  INVESTMENT SECURITIES



A summary of the amortized cost and fair values of investment securities at June 30, 2017 and December 31, 2016 follows:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Amortized

 

Gross Unrealized

 

Fair

(Dollars in thousands)

Cost

 

Gains

 

Losses

 

Value

At June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$

 10,382 

 

$

 252 

 

$

 (2)

 

$

 10,632 

Total

$

 10,382 

 

$

 252 

 

$

 (2)

 

$

 10,632 



 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$

 64,502 

 

$

 353 

 

$

 (63)

 

$

 64,792 

Obligations of state and political subdivisions

 

 45,306 

 

 

 624 

 

 

 (74)

 

 

 45,856 

Residential mortgage-backed securities

 

 285,835 

 

 

 411 

 

 

 (1,771)

 

 

 284,475 

Asset-backed securities

 

 8,511 

 

 

 18 

 

 

 (32)

 

 

 8,497 

Corporate debt

 

 20,018 

 

 

 450 

 

 

 (57)

 

 

 20,411 

Total

$

 424,172 

 

$

 1,856 

 

$

 (1,997)

 

$

 424,031 



 

 

 

 

 

 

 

 

 

 

 

At December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

$

 10,443 

 

$

 242 

 

$

 (8)

 

$

 10,677 

Total

$

 10,443 

 

$

 242 

 

$

 (8)

 

$

 10,677 



 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

$

 69,691 

 

$

 201 

 

$

 (198)

 

$

 69,694 

Obligations of state and political subdivisions

 

 46,105 

 

 

 461 

 

 

 (191)

 

 

 46,375 

Residential mortgage-backed securities

 

 282,035 

 

 

 573 

 

 

 (1,966)

 

 

 280,642 

Asset-backed securities

 

 9,265 

 

 

 -

 

 

 (88)

 

 

 9,177 

Corporate debt

 

 20,017 

 

 

 385 

 

 

 (72)

 

 

 20,330 

Total

$

 427,113 

 

$

 1,620 

 

$

 (2,515)

 

$

 426,218 



Residential mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association. Other securities consist of corporate stock.



Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank (“FHLB”) stock, and certain other investments, are carried at cost and included in other assets on the consolidated statements of financial condition. Total investments carried at cost were $17.1 million at June 30, 2017 and $14.6 million at December 31, 2016. There are no identified events or changes in circumstances that may have a significant adverse effect on the investments carried at cost.  

 

A comparison of the amortized cost and approximate fair value of our investment securities by maturity date at June 30, 2017 follows: 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Available for Sale

 

Held to Maturity



Amortized

 

Fair

 

Amortized

 

Fair

(Dollars in thousands)

Cost

 

Value

 

Cost

 

Value

One year or less

$

 26,829 

 

$

 26,854 

 

$

 371 

 

$

 370 

More than one year through five years

 

 265,468 

 

 

 265,416 

 

 

 8,878 

 

 

 9,105 

More than five years through ten years

 

 103,256 

 

 

 102,849 

 

 

 1,133 

 

 

 1,157 

More than ten years

 

 28,619 

 

 

 28,912 

 

 

 -

 

 

 -

Total

$

 424,172 

 

$

 424,031 

 

$

 10,382 

 

$

 10,632 



The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to be prepaid and are based on expected maturities. Expected maturities differ from contractual maturities because borrowers of the underlying mortgages may have the right to call or prepay obligations with or without prepayment penalties. No other prepayment or repricing assumptions have been applied to our investment securities for this analysis. 

 

Gain or loss on sale of investments is based upon the specific identification method. The table below shows the proceeds, gross realized gains and gross realized losses recognized on the investment portfolio for the three and six months ended June 30, 2017 and June 30, 2016. Proceeds from sales recognized during the six months ended June 30, 2017 resulted from the sale of a private equity investment carried at cost and recorded in other assets. Proceeds from the sales during the three and six months ended June 30, 2016 resulted from a slight restructuring of our investment portfolio.







 

 

 

 

 

 

 

 

 

 

 



 

For the three months

 

 

For the six months



 

ended June 30,

 

 

ended June 30,

(Dollars in thousands)

 

2017

 

 

2016

 

 

2017

 

 

2016

Proceeds from sales

$

 -

 

$

 18,726 

 

$

 601 

 

$

 41,530 

Gross realized gains

 

 -

 

 

 173 

 

 

 451 

 

 

 345 

Gross realized losses

 

 -

 

 

 (8)

 

 

 -

 

 

 (54)



The following table shows securities with gross unrealized losses and their fair values by the length of time that the individual securities had been in a continuous unrealized loss position at June 30, 2017 and December 31, 2016. Securities whose market values exceed cost are excluded from this table. 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

Continuous Unrealized

 

 

 



 

 

Amortized Cost of

 

Loss Existing for:

 

Fair Value of



Number of

 

Securities with

 

Less than

 

More than

 

Securities with

(Dollars in thousands)

Securities

 

Unrealized Losses

 

12 Months

 

12 Months

 

Unrealized Losses

At June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

 5 

 

$

 442 

 

$

 (1)

 

$

 (1)

 

$

 440 



 5 

 

$

 442 

 

$

 (1)

 

$

 (1)

 

$

 440 



 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

 11 

 

$

 27,667 

 

$

 (42)

 

$

 (21)

 

$

 27,604 

Obligations of state and political subdivisions

 11 

 

 

 8,343 

 

 

 (22)

 

 

 (52)

 

 

 8,269 

Residential mortgage-backed securities

 101 

 

 

 236,213 

 

 

 (1,356)

 

 

 (415)

 

 

 234,442 

Asset-backed securities

 1 

 

 

 3,958 

 

 

 -

 

 

 (32)

 

 

 3,926 

Corporate debt

 2 

 

 

 5,007 

 

 

 -

 

 

 (57)

 

 

 4,950 

Total

 126 

 

$

 281,188 

 

$

 (1,420)

 

$

 (577)

 

$

 279,191 



 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

 7 

 

$

 1,987 

 

$

 (8)

 

$

 -

 

$

 1,979 



 7 

 

$

 1,987 

 

$

 (8)

 

$

 -

 

$

 1,979 



 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agency securities

 13 

 

$

 34,734 

 

$

 (111)

 

$

 (87)

 

$

 34,536 

Obligations of state and political subdivisions

 36 

 

 

 18,283 

 

 

 (145)

 

 

 (46)

 

 

 18,092 

Residential mortgage-backed securities

 89 

 

 

 225,986 

 

 

 (1,618)

 

 

 (348)

 

 

 224,020 

Asset-backed securities

 3 

 

 

 9,265 

 

 

 -

 

 

 (88)

 

 

 9,177 

Corporate debt

 2 

 

 

 5,005 

 

 

 -

 

 

 (72)

 

 

 4,933 

Total

 143 

 

$

 293,273 

 

$

 (1,874)

 

$

 (641)

 

$

 290,758 



We evaluate all securities on an individual basis for other-than-temporary impairment on at least a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value. 

 

We have the ability and intent to hold the securities classified as held to maturity until they mature, at which time we expect to receive full value for the securities. Furthermore, as of June 30, 2017, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is not likely that we will have to sell any such securities before a recovery of cost. The declines in fair value were attributable to recent increases in market interest rates over the yields available at the time the underlying securities were purchased or increases in spreads over market interest rates. Management does not believe any of the securities are impaired due to credit quality. Accordingly, as of June 30, 2017, management believes the impairment of these investments is not deemed to be other-than-temporary. 

 

As required by law, available for sale investment securities are pledged to secure public and trust deposits, sweep agreements, and borrowings from the FHLB. Securities with an amortized cost of $215.3 million and $199.0 million were pledged to meet such requirements at June 30, 2017 and December 31, 2016, respectively. Any amount over-pledged can be released at any time.