XML 24 R12.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Securities Available-For-Sale | 6 Months Ended
--- | ---
Jun. 30, 2017
Investments, Debt and Equity Securities [Abstract] |
Securities Available-For-Sale | Note 4. Securities Available-For-Sale The Company’s securities are classified as available-for-sale at June 30, 2017 and December 31, 2016. Securities available-for-sale are reported at fair value with unrealized gains or losses included in equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value as of June 30, 2017 and December 31, 2016. Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note 7 of the Notes to Consolidated Financial Statements for a further discussion. Transfers of debt securities from the held-to-maturity category to the available-for-sale category are made at fair value at the date of transfer. For transfers from the available-for-sale category to the held-to maturity category the unrealized holding gain or loss at the date of transfer remains in accumulated other comprehensive income and in the carrying value of the held-to-maturity security. Unrealized holding gains or losses that remain in accumulated other comprehensive income are amortized or accreted out of other comprehensive income with an offsetting entry to interest income as a yield adjustment through earnings over the remaining terms of the securities. For transfers from the held-to-maturity category to the available-for-sale category unrealized holding gain or loss at the date of the transfer shall be recognized in accumulated other comprehensive income, net of applicable taxes. During the quarter ended September 30, 2016, the Company transferred all securities previously categorized as held-to-maturity to available-for-sale classification. The transfer resulted in an increase of approximately $210 million in amortized cost basis of available-for-sale securities and resulted in a net increase to accumulated other comprehensive income of $7.4 million, net of tax. The transfer enhances liquidity and increases flexibility with regard to asset-liability management and balance sheet composition. As a result of the transfer, the Company believes it has tainted its held-to-maturity classification and judgment will be required in the future in determining when circumstances have changed such that management can assert that it has the intent and ability to hold debt securities to maturity. Based on this guidance, the Company does not expect to classify any securities as held-to-maturity within the near future. The following tables present information related to the Company’s securities at June 30, 2017 and December 31, 2016:
|  |  |  | Gross |  | Gross |  |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
June 30, 2017 | Cost |  | Gains |  | Losses |  | Value
| (dollars in thousands)
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
Federal agency obligations | $ | 59,509 |  | $ | 317 |  | $ | (181 | ) |  | $ | 59,645
Residential mortgage pass-through securities |  | 140,963 |  |  | 635 |  |  | (1,198 | ) |  |  | 140,400
Commercial mortgage pass-through securities |  | 4,120 |  |  | 53 |  |  | - |  |  |  | 4,173
Obligations of U.S. states and political subdivisions |  | 135,181 |  |  | 2,309 |  |  | (1,136 | ) |  |  | 136,354
Trust preferred securities |  | 4,576 |  |  | 83 |  |  | (73 | ) |  |  | 4,586
Corporate bonds and notes |  | 30,352 |  |  | 252 |  |  | (316 | ) |  |  | 30,288
Asset-backed securities |  | 13,293 |  |  | 48 |  |  | (60 | ) |  |  | 13,281
Certificates of deposit |  | 622 |  |  | 7 |  |  | - |  |  |  | 629
Equity securities |  | 377 |  |  | 227 |  |  | - |  |  |  | 604
Other securities |  | 12,454 |  |  | - |  |  | (284 | ) |  |  | 12,170
Total securities available-for-sale | $ | 401,447 |  | $ | 3,931 |  | $ | (3,248 | ) |  | $ | 402,130
|  |  |  | Gross |  | Gross |  |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
December 31, 2016 | Cost |  | Gains |  | Losses |  | Value
| (dollars in thousands)
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
Federal agency obligations | $ | 52,826 |  | $ | 282 |  | $ | (271 | ) |  | $ | 52,837
Residential mortgage pass-through securities |  | 72,922 |  |  | 519 |  |  | (944 | ) |  |  | 72,497
Commercial mortgage pass-through securities |  | 4,186 |  |  | 23 |  |  | - |  |  |  | 4,209
Obligations of U.S. states and political subdivisions |  | 148,747 |  |  | 2,789 |  |  | (931 | ) |  |  | 150,605
Trust preferred securities |  | 5,575 |  |  | 242 |  |  | (151 | ) |  |  | 5,666
Corporate bonds and notes |  | 36,717 |  |  | 586 |  |  | (375 | ) |  |  | 36,928
Asset-backed securities |  | 14,867 |  |  | 2 |  |  | (286 | ) |  |  | 14,583
Certificates of deposit |  | 973 |  |  | 10 |  |  | - |  |  |  | 983
Equity securities |  | 376 |  |  | 192 |  |  | - |  |  |  | 568
Other securities |  | 14,739 |  |  | - |  |  | (325 | ) |  |  | 14,414
Total securities available-for-sale | $ | 351,928 |  | $ | 4,645 |  | $ | (3,283 | ) |  | $ | 353,290
The following table presents information for securities at June 30, 2017, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.
| June 30, 2017
| Amortized |  | Fair
| Cost |  | Value
| (dollars in thousands)
Securities available-for-sale: |  |  |  |  |
Due in one year or less | $ | 5,577 |  | $ | 5,602
Due after one year through five years |  | 29,846 |  |  | 30,058
Due after five years through ten years |  | 39,632 |  |  | 40,261
Due after ten years |  | 168,478 |  |  | 168,862
Residential mortgage pass-through securities |  | 140,963 |  |  | 140,400
Commercial mortgage pass-through securities |  | 4,120 |  |  | 4,173
Equity securities |  | 377 |  |  | 604
Other securities |  | 12,454 |  |  | 12,170
Total | $ | 401,447 |  | $ | 402,130
Gross gains and losses from the sales, calls and maturities of securities for periods presented were as follows:
|  | Three Months Ended |  | Six Months Ended
|  | June 30, |  | June 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
|  | (dollars in thousands)
Proceeds |  | $ | - |  | $ | 6,573 |  | $ | 29,543 |  |  | $ | 6,573
Gross gains on sales of securities |  |  | - |  |  | 103 |  |  | 1,596 |  |  |  | 103
Gross losses on sales of securities |  |  | - |  |  | - |  |  | - |  |  |  | -
Net gains on sales of securities |  |  | - |  |  | 103 |  |  | 1,596 |  |  |  | 103
Less: tax provision on net gains |  |  | - |  |  | 42 |  |  | (579 | ) |  |  | 42
Net gains on sales of securities, after tax |  | $ | - |  | $ | 61 |  | $ | 1,017 |  |  | $ | 61
The Company reviews all securities for potential recognition of other-than-temporary impairment. The Company maintains a watch list for the identification and monitoring of securities experiencing problems that require a heightened level of review. This could include credit rating downgrades. The Company’s assessment of whether an impairment in the portfolio is other-than temporary includes factors such as whether the issuer has defaulted on scheduled payments, announced restructuring and/or filed for bankruptcy, has disclosed severe liquidity problems that cannot be resolved, disclosed deteriorating financial condition or sustained significant losses. Temporarily Impaired Securities The Company does not believe that any of the unrealized losses, which were comprised of 82 and 84 securities as of June 30, 2017 and December 31, 2016, respectively, represent an other-than-temporary impairment (“OTTI”). The gross unrealized losses associated with U.S. Treasury and agency securities, federal agency obligations, mortgage-backed securities, corporate bonds, tax-exempt securities, asset-backed securities, trust preferred securities, mutual funds and equity securities are not considered to be other-than-temporary because these unrealized losses are related to changes in interest rates and do not affect the expected cash flows of the underlying collateral or issuer. Factors which may contribute to unrealized losses include credit risk, market risk, changes in interest rates, economic cycles, and liquidity risk. The magnitude of any unrealized loss may be affected by the relative concentration of the Company’s investment in any one issuer or industry. The Company has established policies to reduce exposure through diversification of the securities portfolio including limits on concentrations to any one issuer. The Company believes the securities portfolio is prudently diversified. The unrealized losses included in the tables below are primarily related to changes in interest rates and credit spreads. All of the Company’s securities are performing and are expected to continue to perform in accordance with their respective contractual terms and conditions. These are largely intermediate duration holdings and, in certain cases, monthly principal payments can further reduce loss exposure resulting from an increase in rates. The Company evaluates all securities with unrealized losses quarterly to determine whether the loss is other-than-temporary. Unrealized losses in the corporate debt securities category consist primarily of senior unsecured corporate debt securities issued by large financial institutions, insurance companies and other corporate issuers. Single issuer corporate trust preferred securities are also included, and in the case of one holding the market valuation loss is largely based upon the floating rate coupon and corresponding market valuation. Neither that trust preferred issuer, nor any other corporate issuers, have defaulted on interest payments. The unrealized loss in equity securities consists of losses on other bank equities. The decline in fair value is due in large part to the lack of an active trading market for these securities, changes in market credit spreads and rating agency downgrades. Management concluded that these securities were not OTTI at June 30, 2017. In determining whether or not securities are OTTI, the Company must exercise considerable judgment. Accordingly, there can be no assurance that the actual results will not differ from the Company’s judgments and that such differences may not require the future recognition of OTTI charges that could have a material effect on the Company’s financial position and results of operations. In addition, the value of, and the realization of any loss on, a security is subject to numerous risks as cited above. 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 June 30, 2017 and December 31, 2016:
|  | June 30, 2017
|  | Total |  | Less than 12 Months |  | 12 Months or Longer
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
|  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
|  | (dollars in thousands)
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal agency obligation |  | $ | 22,344 |  | $ | (181 | ) |  | $ | 21,184 |  | $ | (177 | ) |  | $ | 1,160 |  | $ | (4 | )
Residential mortgage pass-through securities |  |  | 88,378 |  |  | (1,198 | ) |  |  | 86,925 |  |  | (1,161 | ) |  |  | 1,453 |  |  | (37 | )
Obligations of U.S. states and political subdivisions |  |  | 58,315 |  |  | (1,136 | ) |  |  | 58,315 |  |  | (1,136 | ) |  |  | - |  |  | - |
Trust preferred securities |  |  | 1,505 |  |  | (73 | ) |  |  | - |  |  | - |  |  |  | 1,505 |  |  | (73 | )
Corporate bonds and notes |  |  | 16,292 |  |  | (316 | ) |  |  | 7,086 |  |  | (164 | ) |  |  | 9,206 |  |  | (152 | )
Asset-backed securities |  |  | 8,249 |  |  | (60 | ) |  |  | - |  |  | - |  |  |  | 8,249 |  |  | (60 | )
Other securities |  |  | 11,182 |  |  | (284 | ) |  |  | 5,905 |  |  | (61 | ) |  |  | 5,277 |  |  | (223 | )
Total temporarily impaired securities |  | $ | 206,265 |  | $ | (3,248 | ) |  | $ | 179,415 |  | $ | (2,699 | ) |  | $ | 26,850 |  | $ | (549 | )
|  | December 31, 2016
|  | Total |  | Less than 12 Months |  | 12 Months or Longer
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
|  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
|  | (dollars in thousands)
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal agency obligation |  | $ | 22,672 |  | $ | (271 | ) |  | $ | 21,416 |  | $ | (262 | ) |  | $ | 1,256 |  | $ | (9 | )
Residential mortgage pass-through securities |  |  | 50,136 |  |  | (944 | ) |  |  | 49,817 |  |  | (937 | ) |  |  | 319 |  |  | (7 | )
Obligations of U.S. states and political subdivisions |  |  | 52,307 |  |  | (931 | ) |  |  | 52,307 |  |  | (931 | ) |  |  | - |  |  | - |
Trust preferred securities |  |  | 1,427 |  |  | (151 | ) |  |  | - |  |  | - |  |  |  | 1,427 |  |  | (151 | )
Corporate bonds and notes |  |  | 15,930 |  |  | (375 | ) |  |  | 7,671 |  |  | (265 | ) |  |  | 8,259 |  |  | (110 | )
Asset-backed securities |  |  | 13,404 |  |  | (286 | ) |  |  | 3,743 |  |  | (88 | ) |  |  | 9,661 |  |  | (198 | )
Other securities |  |  | 11,467 |  |  | (325 | ) |  |  | - |  |  | - |  |  |  | 11,467 |  |  | (325 | )
Total temporarily impaired securities |  | $ | 167,343 |  | $ | (3,283 | ) |  | $ | 134,954 |  | $ | (2,483 | ) |  | $ | 32,389 |  | $ | (800 | )
Securities having a carrying value of approximately $106.0 million and $121.9 million at June 30, 2017 and December 31, 2016, respectively, were pledged to secure public deposits, Federal Reserve Bank discount window borrowings, Federal Home Loan Bank (“FHLB”) advances and for other purposes required or permitted by law. As of June 30, 2017 and December 31, 2016, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=4738149 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 954 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2289146 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration