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Securities | 9 Months Ended
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Sep. 30, 2016
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES Trading Securities The Company had trading securities of $809,000 and $356,000 as of September 30, 2016 and December 31, 2015, respectively. These securities are held in a rabbi trust and will be used for future payments associated with the Company’s non-qualified 401(k) Restoration Plan and Non-Qualified Deferred Compensation Plan. Available for Sale and Held to Maturity Securities The following table presents a summary of the amortized cost and gross unrealized holding gains and losses recorded in other comprehensive income and fair value of securities available for sale and securities held to maturity for the periods below:
| September 30, 2016 |  | December 31, 2015
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
| (Dollars in thousands)
Available for sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency securities | $ | 24,502 |  |  | $ | 804 |  |  | $ | — |  |  | $ | 25,306 |  |  | $ | 29,958 |  |  | $ | 261 |  |  | $ | (4 | ) |  | $ | 30,215 |
Agency mortgage-backed securities | 178,095 |  |  | 7,481 |  |  | (3 | ) |  | 185,573 |  |  | 207,693 |  |  | 4,227 |  |  | (983 | ) |  | 210,937 |
Agency collateralized mortgage obligations | 107,466 |  |  | 1,286 |  |  | (156 | ) |  | 108,596 |  |  | 64,157 |  |  | 179 |  |  | (752 | ) |  | 63,584 |
State, county, and municipal securities | 4,255 |  |  | 105 |  |  | — |  |  | 4,360 |  |  | 4,543 |  |  | 116 |  |  | — |  |  | 4,659 |
Single issuer trust preferred securities issued by banks | 2,324 |  |  | 4 |  |  | (31 | ) |  | 2,297 |  |  | 2,865 |  |  | 8 |  |  | (81 | ) |  | 2,792 |
Pooled trust preferred securities issued by banks and insurers | 2,200 |  |  | — |  |  | (662 | ) |  | 1,538 |  |  | 2,217 |  |  | — |  |  | (645 | ) |  | 1,572 |
Small business administration pooled securities | 38,678 |  |  | 1,202 |  |  | — |  |  | 39,880 |  |  | 40,472 |  |  | 87 |  |  | (110 | ) |  | 40,449 |
Equity securities | 19,000 |  |  | 701 |  |  | (243 | ) |  | 19,458 |  |  | 13,235 |  |  | 374 |  |  | (568 | ) |  | 13,041 |
Total available for sale securities | $ | 376,520 |  |  | $ | 11,583 |  |  | $ | (1,095 | ) |  | $ | 387,008 |  |  | $ | 365,140 |  |  | $ | 5,252 |  |  | $ | (3,143 | ) |  | $ | 367,249 |
Held to maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 1,008 |  |  | $ | 81 |  |  | $ | — |  |  | $ | 1,089 |  |  | $ | 1,009 |  |  | $ | 55 |  |  | $ | — |  |  | $ | 1,064 |
Agency mortgage-backed securities | 148,822 |  |  | 6,309 |  |  | — |  |  | 155,131 |  |  | 167,134 |  |  | 3,460 |  |  | (219 | ) |  | 170,375 |
Agency collateralized mortgage obligations | 246,744 |  |  | 4,072 |  |  | (556 | ) |  | 250,260 |  |  | 267,348 |  |  | 1,195 |  |  | (3,652 | ) |  | 264,891 |
State, county, and municipal securities | — |  |  | — |  |  | — |  |  | — |  |  | 225 |  |  | 2 |  |  | — |  |  | 227 |
Single issuer trust preferred securities issued by banks | 1,500 |  |  | 47 |  |  | — |  |  | 1,547 |  |  | 1,500 |  |  | 22 |  |  | — |  |  | 1,522 |
Small business administration pooled securities | 32,689 |  |  | 1,118 |  |  | — |  |  | 33,807 |  |  | 35,291 |  |  | 437 |  |  | (64 | ) |  | 35,664 |
Corporate debt securities | — |  |  | — |  |  | — |  |  | — |  |  | 5,000 |  |  | 6 |  |  | — |  |  | 5,006 |
Total held to maturity securities | $ | 430,763 |  |  | $ | 11,627 |  |  | $ | (556 | ) |  | $ | 441,834 |  |  | $ | 477,507 |  |  | $ | 5,177 |  |  | $ | (3,935 | ) |  | $ | 478,749 |
Total | $ | 807,283 |  |  | $ | 23,210 |  |  | $ | (1,651 | ) |  | $ | 828,842 |  |  | $ | 842,647 |  |  | $ | 10,429 |  |  | $ | (7,078 | ) |  | $ | 845,998 |
When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. The actual maturities of certain securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of securities available for sale and securities held to maturity as of September 30, 2016 is presented below:
| Available for Sale |  | Held to Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
| (Dollars in thousands)
Due in one year or less | $ | 999 |  |  | $ | 1,003 |  |  | $ | 11 |  |  | $ | 11 |
Due after one year to five years | 30,422 |  |  | 31,258 |  |  | 16,099 |  |  | 16,739 |
Due after five to ten years | 86,511 |  |  | 89,455 |  |  | 24,594 |  |  | 25,602 |
Due after ten years | 239,588 |  |  | 245,834 |  |  | 390,059 |  |  | 399,482 |
Total debt securities | $ | 357,520 |  |  | $ | 367,550 |  |  | $ | 430,763 |  |  | $ | 441,834 |
Equity securities | $ | 19,000 |  |  | $ | 19,458 |  |  | $ | — |  |  | $ | — |
Total | $ | 376,520 |  |  | $ | 387,008 |  |  | $ | 430,763 |  |  | $ | 441,834 |
Inclusive in the table above is $11.9 million of callable securities in the Company’s investment portfolio at September 30, 2016. The carrying value of securities pledged to secure public funds, trust deposits, repurchase agreements and for other purposes, as required or permitted by law, was $451.7 million and $444.8 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of stockholders’ equity. Other-Than-Temporary Impairment ("OTTI") The Company continually reviews investment securities for the existence of OTTI, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, the credit worthiness of the obligor of the security, volatility of earnings, current analysts’ evaluations, the Company’s intent to sell the security, or whether it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, as well as other qualitative factors. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. The following tables show the gross unrealized losses and fair value of the Company’s investments in an unrealized loss position, which the Company has not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
| September 30, 2016
|  |  | Less than 12 months |  | 12 months or longer |  | Total
| # of holdings |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
| (Dollars in thousands)
Agency mortgage-backed securities | 2 |  |  | $ | 1,016 |  |  | $ | (3 | ) |  | $ | — |  |  | $ | — |  |  | $ | 1,016 |  |  | $ | (3 | )
Agency collateralized mortgage obligations | 9 |  |  | 14,530 |  |  | (30 | ) |  | 51,578 |  |  | (682 | ) |  | 66,108 |  |  | (712 | )
Single issuer trust preferred securities issued by banks and insurers | 2 |  |  | — |  |  | — |  |  | 2,048 |  |  | (31 | ) |  | 2,048 |  |  | (31 | )
Pooled trust preferred securities issued by banks and insurers | 1 |  |  | — |  |  | — |  |  | 1,537 |  |  | (662 | ) |  | 1,537 |  |  | (662 | )
Equity securities | 21 |  |  | 515 |  |  | (16 | ) |  | 6,903 |  |  | (227 | ) |  | 7,418 |  |  | (243 | )
Total temporarily impaired securities | 35 |  |  | $ | 16,061 |  |  | $ | (49 | ) |  | $ | 62,066 |  |  | $ | (1,602 | ) |  | $ | 78,127 |  |  | $ | (1,651 | )
| December 31, 2015
|  |  | Less than 12 months |  | 12 months or longer |  | Total
| # of holdings |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
| (Dollars in thousands)
U.S.government agency securities | 3 |  |  | $ | 1,990 |  |  | $ | (4 | ) |  | $ | — |  |  | $ | — |  |  | $ | 1,990 |  |  | $ | (4 | )
Agency mortgage-backed securities | 57 |  |  | 112,648 |  |  | (1,062 | ) |  | 4,297 |  |  | (140 | ) |  | 116,945 |  |  | (1,202 | )
Agency collateralized mortgage obligations | 23 |  |  | 147,707 |  |  | (1,420 | ) |  | 80,927 |  |  | (2,984 | ) |  | 228,634 |  |  | (4,404 | )
Single issuer trust preferred securities issued by banks and insurers | 2 |  |  | 1,018 |  |  | (33 | ) |  | 1,018 |  |  | (48 | ) |  | 2,036 |  |  | (81 | )
Pooled trust preferred securities issued by banks and insurers | 1 |  |  | — |  |  | — |  |  | 1,572 |  |  | (645 | ) |  | 1,572 |  |  | (645 | )
Small business administration pooled securities | 3 |  |  | 37,986 |  |  | (174 | ) |  | — |  |  | — |  |  | 37,986 |  |  | (174 | )
Equity securities | 34 |  |  | 3,481 |  |  | (189 | ) |  | 4,971 |  |  | (379 | ) |  | 8,452 |  |  | (568 | )
Total temporarily impaired securities | 123 |  |  | $ | 304,830 |  |  | $ | (2,882 | ) |  | $ | 92,785 |  |  | $ | (4,196 | ) |  | $ | 397,615 |  |  | $ | (7,078 | )
The Company does not intend to sell these investments and has determined based upon available evidence that it is more likely than not that the Company will not be required to sell the security before the recovery of its amortized cost basis. As a result, the Company does not consider these investments to be OTTI. The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations. As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category are as follows at September 30, 2016:
• | Agency Mortgage-Backed Securities and Agency Collateralized Mortgage Obligations: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are either implicitly or explicitly guaranteed by the U.S. Government or one of its agencies.
• | Single Issuer Trust Preferred Securities: This portfolio consists of two securities, one of which is below investment grade. The unrealized loss on these securities is attributable to the illiquid nature of the trust preferred market in the current economic environment. Management evaluates various financial metrics for the issuers, including regulatory capital ratios of the issuers.
• | Pooled Trust Preferred Securities: This portfolio consists of one below investment grade security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic and regulatory environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.
• | Equity Securities: This portfolio consists of mutual funds and other equity investments. During some periods, the mutual funds in the Company’s investment portfolio may have unrealized losses resulting from market fluctuations as well as the risk premium associated with that particular asset class. For example, emerging market equities tend to trade at a higher risk premium than U.S. government bonds and thus, will fluctuate to a greater degree on both the upside and the downside. In the context of a well-diversified portfolio, however, the correlation amongst the various asset classes represented by the funds serves to minimize downside risk. The Company evaluates each mutual fund in the portfolio regularly and measures performance on both an absolute and relative basis. A reasonable recovery period for positions with an unrealized loss is based on management’s assessment of general economic data, trends within a particular asset class, valuations, earnings forecasts and bond durations. The Company has the ability and intent to hold these equity securities until a recovery of fair value.
The following table shows the total OTTI that the Company recorded for the periods indicated:
| Three Months Ended |  | Nine Months Ended
| September 30 |  | September 30
| 2016 |  | 2015 |  | 2016 |  | 2015
| (Dollars in thousands)
Gross change in OTTI recorded on certain investments | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 84 |
Portion of OTTI recognized in OCI | — |  |  | — |  |  | — |  |  | (84 | )
Total credit related OTTI recognized in earnings | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
The following table shows the cumulative credit related component of OTTI for the periods indicated:
| Three Months Ended |  | Nine Months Ended
| September 30 |  | September 30
| 2016 |  | 2015 |  | 2016 |  | 2015
| (Dollars in thousands)
Balance at beginning of period | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (9,997 | )
Add |  |  |  |  |  |  |
Incurred on securities not previously impaired | — |  |  | — |  |  | — |  |  | — |
Incurred on securities previously impaired | — |  |  | — |  |  | — |  |  | — |
Less |  |  |  |  |  |  |
Securities sold during the period | — |  |  | — |  |  | — |  |  | 9,997 |
Reclassification due to changes in Company's intent | — |  |  | — |  |  | — |  |  | — |
Increases in cash flow expected to be collected | — |  |  | — |  |  | — |  |  | — |
Balance at end of period | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |

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