Investment Securities (Tables)

12 Months Ended

Dec. 31, 2013

Unrealized gains on investment securities

The following tables present information related to the Corporation’s portfolio of securities available-for-sale and held-to-maturity at December 31, 2013 and 2012.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	December 31, 2013
	(Dollars in Thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	14,344	$	—	$	(825)	$	13,519
Federal agency obligations		20,567		29		(655)		19,941
Residential mortgage pass-through securities		48,312		791		(229)		48,874
Commercial mortgage pass-through securities		7,145		3		(157)		6,991
Obligations of U.S. states and political subdivisions		30,804		711		(55)		31,460
Trust preferred securities		19,763		150		(510)		19,403
Corporate bonds and notes		154,182		4,930		(482)		158,630
Asset-backed securities		15,733		246		—		15,979
Certificates of deposit		2,250		32		(20)		2,262
Equity securities		376		—		(89)		287
Other securities		5,671		68		(15)		5,724
Total	$	319,147	$	6,960	$	(3,037)	$	323,070
Investment Securities Held-to-Maturity:
U.S. Treasury and agency securities	$	28,056	$	—	$	(1,019)	$	27,037
Federal agency obligations		15,249		23		(389)		14,883
Residential mortgage-backed securities		2,246		—		(64)		2,182
Commercial mortgage-backed securities		4,417		41		(62)		4,396
Obligations of U.S. states and political subdivisions		127,418		1,303		(3,688)		125,033
Corporate bonds and notes		37,900		149		(622)		37,427
Total	$	215,286	$	1,516	$	(5,844)	$	210,958
Total investment securities	$	534,433	$	8,476	$	(8,881)	$	534,028

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	December 31, 2012
	(Dollars in Thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	11,870	$	62	$	(23)	$	11,909
Federal agency obligations		20,207		333		(5)		20,535
Residential mortgage pass-through securities		52,400		1,385		(1)		53,784
Commercial mortgage pass-through securities		9,725		244		—		9,969
Obligations of U.S. states and political subdivisions		103,193		4,653		(132)		107,714
Trust preferred securities		22,279		144		(1,174)		21,249
Corporate bonds and notes		228,681		9,095		(371)		237,405
Collateralized mortgage obligations		2,120		—		—		2,120
Asset-backed securities		19,431		311		—		19,742
Certificates of deposit		2,854		21		(10)		2,865
Equity securities		535		—		(210)		325
Other securities		9,145		68		(15)		9,198
Total	$	482,440	$	16,316	$	(1,941)	$	496,815
Investment Securities Held-to-Maturity:
Federal agency obligations	$	4,178	$	79	$	—	$	4,257
Commercial mortgage-backed securities		5,501		154		(5)		5,650
Obligations of U.S. states and political subdivisions		48,385		4,139		—		52,524
Total	$	58,064	$	4,372	$	(5)	$	62,431
Total investment securities	$	540,504	$	20,688	$	(1,946)	$	559,246

Investments classified by maturity date

The following table presents information for investments in securities available-for-sale and held-to-maturity at December 31, 2013, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.

	December 31, 2013
	Amortized Cost		Fair Value
	(Dollars in Thousands)
Investment Securities Available-for-Sale:
Due in one year or less	$	9,738	$	9,780
Due after one year through five years		63,206		64,802
Due after five years through ten years		123,765		126,024
Due after ten years		60,934		60,588
Residential mortgage pass-through securities		48,312		48,874
Commercial mortgage pass-through securities		7,145		6,991
Equity securities		376		287
Other securities		5,671		5,724
Total	$	319,147	$	323,070
Investment Securities Held-to-Maturity:
Due in one year or less	$	2,061	$	2,065
Due after one year through five years		12,547		12,699
Due after five years through ten years		65,692		64,027
Due after ten years		128,323		125,589
Residential mortgage-backed securities		2,246		2,182
Commercial mortgage-backed securities		4,417		4,396
Total	$	215,286	$	210,958
Total investment securities	$	534,433	$	534,028

Schedule of Realized Gain (Loss)

Gross gains and losses from the sales of investment securities for the years ended December 31, 2013, 2012 and 2011 were as follows:

	Years Ended December 31,
(Dollars in Thousands)	2013		2012		2011
Gross gains on sales of investment securities	$	2,451	$	2,905	$	4,045
Gross losses on sales of investment securities		88		23		69
Net gains on sales of investment securities	$	2,363	$	2,882	$	3,976

Schedule of OTTI Charges for period

Summary of Other-than-Temporary Impairment Charges

	Years Ended December 31,
	2013		2012		2011
	(Dollars in Thousands)
One variable rate private label CMO	$	—	$	484	$	18
Pooled trust preferred securities		628		68		—
Principal losses on a variable rate CMO		24		318		324
Total other-than-temporary impairment charges	$	652	$	870	$	342

Schedule of preferred security and associated ratings

The following table presents detailed information for each trust preferred security held by the Corporation at December 31, 2013, of which all but one has at least one rating below investment grade.

Deal Name	Single Issuer or Pooled	Class/ Tranche		Amortized Cost		Fair Value		Gross Unrealized Gain (Loss)		Lowest Credit Rating Assigned	Number of Banks Currently Performing	Deferrals and Defaults as % of Original Collateral	Expected Deferral/Defaults as % of Remaining Performing Collateral
	(Dollars in Thousands)
Countrywide Capital IV	Single		—	$	1,771	$	1,772	$	1	BB+	1	None	None
Countrywide Capital V	Single		—		2,747		2,784		37	BB+	1	None	None
Countrywide Capital V	Single		—		250		253		3	BB+	1	None	None
Citigroup Cap IX	Single		—		992		999		7	BB+	1	None	None
Citigroup Cap IX	Single		—		1,906		1,927		21	BB+	1	None	None
Citigroup Cap XI	Single		—		246		248		2	BB+	1	None	None
Nationsbank Cap Trust III	Single		—		1,574		1,275		(299)	BB+	1	None	None
Morgan Stanley Cap Trust IV	Single		—		2,500		2,372		(128)	BB+	1	None	None
Morgan Stanley Cap Trust IV	Single		—		1,742		1,659		(83)	BB+	1	None	None
Saturns — GS 2004-04	Single		—		536		536		—	BB+	1	None	None
Goldman Sachs	Single		—		999		1,011		12	BB+	1	None	None
Stifel Financial	Single		—		4,500		4,567		67	BBB-	1	None	None
Total				$	19,763	$	19,403	$	(360)

Credit loss portion of OTTI recognized in earnings on debt securities

Credit Loss Portion of OTTI Recognized in Earning on Debt Securities

	Years Ended December 31,
	2013		2012		2011
	(Dollars in Thousands)
Balance of credit-related OTTI at January 1,	$	4,450	$	6,539	$	6,197
Addition:
Credit losses for which other-than-temporary impairment was not previously recognized		652		870		342
Reduction:
Credit losses for securities sold during the period		(5,102)		(2,959)		—
Balance of credit-related OTTI at December 31,	$	—	$	4,450	$	6,539

Schedule of unrealized losses not recognized in income

The following tables indicate gross unrealized losses not recognized in income and fair value, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position at December 31, 2013 and 2012:

	December 31, 2013
	Total				Less than 12 Months				12 Months or Longer
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in Thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	13,519	$	(825)	$	13,519	$	(825)	$	—	$	—
Federal agency obligation		17,200		(655)		17,200		(655)		—		—
Residential mortgage pass-through securities		18,293		(229)		18,293		(229)		—		—
Commercial mortgage pass-through securities		2,924		(157)		2,924		(157)		—		—
Obligations of U.S. states and political subdivisions		4,199		(55)		4,199		(55)		—		—
Trust preferred securities		5,306		(510)		4,031		(211)		1,275		(299)
Corporate bonds and notes		32,498		(482)		30,533		(448)		1,965		(34)
Certificates of deposit		552		(20)		552		(20)		—		—
Equity securities		287		(89)		—		—		287		(89)
Other securities		985		(15)		—		—		985		(15)
Total		95,763		(3,037)		91,251		(2,600)		4,512		(437)
Investment Securities Held-to-Maturity:
U.S. Treasury and agency securities		27,037		(1,019)		27,037		(1,019)		—		—
Federal agency obligation		13,492		(389)		13,197		(388)		295		(1)
Residential mortgage pass-through securities		2,182		(64)		2,182		(64)		—		—
Commercial mortgage-backed securities		1,395		(62)		1,395		(62)		—		—
Obligations of U.S. states and political subdivisions		66,034		(3,688)		57,072		(2,957)		8,962		(731)
Corporate bonds and notes		27,210		(622)		27,210		(622)		—		—
Total		137,350		(5,844)		128,093		(5,112)		9,257		(732)
Total Temporarily Impaired Securities	$	233,113	$	(8,881)	$	219,344	$	(7,712)	$	13,769	$	(1,169)

	December 31, 2012
	Total				Less than 12 Months				12 Months or Longer
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in Thousands)
Investment Securities Available-for-Sale:
U.S. Treasury and agency securities	$	4,460	$	(23)	$	4,460	$	(23)	$	—	$	—
Federal agency obligation		877		(5)		877		(5)		—		—
Residential mortgage pass-through securities		1,669		(1)		1,669		(1)		—		—
Obligations of U.S. states and political subdivisions		18,360		(132)		18,360		(132)		—		—
Trust preferred securities		11,740		(1,174)		10,494		(18)		1,246		(1,156)
Corporate bonds and notes		26,440		(371)		18,244		(134)		8,196		(237)
Certificates of deposit		388		(10)		388		(10)		—		—
Equity securities		325		(210)		—		—		325		(210)
Other securities		985		(15)		—		—		985		(15)
Total		65,244		(1,941)		54,492		(323)		10,752		(1,618)
Investment Securities Held-to-Maturity:
Commercial mortgage-backed securities		932		(5)		932		(5)		—		—
Total		932		(5)		932		(5)		—		—
Total Temporarily Impaired Securities	$	66,176	$	(1,946)	$	55,424	$	(328)	$	10,752	$	(1,618)

- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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