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Securities | 9 Months Ended
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Sep. 30, 2016
Cash and Cash Equivalents [Abstract] |
Securities |
5. | SECURITIES
Securities available for sale at September 30, 2016 and December 31, 2015 are as follows:
|  | September 30, 2016 |  |  | December 31, 2015 |
|  | Amortized |  |  | Unrealized |  |  | Fair |  |  | Amortized |  |  | Unrealized |  |  | Fair |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Value |  |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
U.S. Gov’t sponsored entities |  | $ | 136,945 |  |  | $ | 2,958 |  |  | $ | (1 | ) |  | $ | 139,902 |  |  | $ | 141,300 |  |  | $ | 1,579 |  |  | $ | (1,128 | ) |  | $ | 141,751 |
State & political subdivisions |  |  | 153,762 |  |  |  | 7,643 |  |  |  | (195 | ) |  |  | 161,210 |  |  |  | 165,828 |  |  |  | 6,234 |  |  |  | (243 | ) |  |  | 171,819 |
Residential & multi-family mortgage |  |  | 137,639 |  |  |  | 1,894 |  |  |  | (511 | ) |  |  | 139,022 |  |  |  | 160,316 |  |  |  | 1,060 |  |  |  | (3,394 | ) |  |  | 157,982 |
Corporate notes & bonds |  |  | 18,299 |  |  |  | 177 |  |  |  | (1,197 | ) |  |  | 17,279 |  |  |  | 19,794 |  |  |  | 165 |  |  |  | (1,271 | ) |  |  | 18,688 |
Pooled trust preferred |  |  | 800 |  |  |  | 902 |  |  |  | 0 |  |  |  | 1,702 |  |  |  | 800 |  |  |  | 2,613 |  |  |  | 0 |  |  |  | 3,413 |
Pooled SBA |  |  | 45,964 |  |  |  | 793 |  |  |  | (122 | ) |  |  | 46,635 |  |  |  | 51,556 |  |  |  | 760 |  |  |  | (907 | ) |  |  | 51,409 |
Other equity securities |  |  | 1,020 |  |  |  | 0 |  |  |  | (26 | ) |  |  | 994 |  |  |  | 1,020 |  |  |  | 0 |  |  |  | (39 | ) |  |  | 981 |
Total |  | $ | 494,429 |  |  | $ | 14,367 |  |  | $ | (2,052 | ) |  | $ | 506,744 |  |  | $ | 540,614 |  |  | $ | 12,411 |  |  | $ | (6,982 | ) |  | $ | 546,043 |
At September 30, 2016 and December 31, 2015, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities. Trading securities at September 30, 2016 and December 31, 2015 are as follows:
|  | September 30, 2016 |  |  | December 31, 2015 |
Corporate equity securities |  | $ | 3,148 |  |  | $ | 3,389 |
Mutual funds |  |  | 965 |  |  |  | 750 |
Certificates of deposit |  |  | 255 |  |  |  | 253 |
Corporate notes and bonds |  |  | 221 |  |  |  | 130 |
U.S. Government sponsored entities |  |  | 55 |  |  |  | 54 |
Total |  | $ | 4,644 |  |  | $ | 4,576 |
Securities with unrealized losses at September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (in thousands): September 30, 2016
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
Description of Securities |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
U.S. Gov’t sponsored entities |  | $ | 0 |  |  | $ | 0 |  |  | $ | 3,001 |  |  | $ | (1 | ) |  | $ | 3,001 |  |  | $ | (1 | )
State & political subdivisions |  |  | 1,669 |  |  |  | (2 | ) |  |  | 272 |  |  |  | (193 | ) |  |  | 1,941 |  |  |  | (195 | )
Residential & multi-family mortgage |  |  | 10,975 |  |  |  | (78 | ) |  |  | 40,280 |  |  |  | (433 | ) |  |  | 51,255 |  |  |  | (511 | )
Corporate notes & bonds |  |  | 1,977 |  |  |  | (23 | ) |  |  | 8,251 |  |  |  | (1,174 | ) |  |  | 10,228 |  |  |  | (1,197 | )
Pooled SBA |  |  | 0 |  |  |  | 0 |  |  |  | 22,441 |  |  |  | (122 | ) |  |  | 22,441 |  |  |  | (122 | )
Other equity securities |  |  | 0 |  |  |  | 0 |  |  |  | 994 |  |  |  | (26 | ) |  |  | 994 |  |  |  | (26 | )
|  | $ | 14,621 |  |  | $ | (103 | ) |  | $ | 75,239 |  |  | $ | (1,949 | ) |  | $ | 89,860 |  |  | $ | (2,052 | )
December 31, 2015
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
Description of Securities |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
U.S. Gov’t sponsored entities |  | $ | 65,675 |  |  | $ | (640 | ) |  | $ | 31,923 |  |  | $ | (488 | ) |  | $ | 97,598 |  |  | $ | (1,128 | )
State & political subdivisions |  |  | 9,103 |  |  |  | (234 | ) |  |  | 2,478 |  |  |  | (9 | ) |  |  | 11,581 |  |  |  | (243 | )
Residential & multi-family mortgage |  |  | 69,631 |  |  |  | (1,562 | ) |  |  | 50,351 |  |  |  | (1,832 | ) |  |  | 119,982 |  |  |  | (3,394 | )
Corporate notes & bonds |  |  | 5,027 |  |  |  | (2 | ) |  |  | 8,144 |  |  |  | (1,269 | ) |  |  | 13,171 |  |  |  | (1,271 | )
Pooled SBA |  |  | 2,908 |  |  |  | (28 | ) |  |  | 27,127 |  |  |  | (879 | ) |  |  | 30,035 |  |  |  | (907 | )
Other equity securities |  |  | 0 |  |  |  | 0 |  |  |  | 981 |  |  |  | (39 | ) |  |  | 981 |  |  |  | (39 | )
|  | $ | 152,344 |  |  | $ | (2,466 | ) |  | $ | 121,004 |  |  | $ | (4,516 | ) |  | $ | 273,348 |  |  | $ | (6,982 | )
The Corporation evaluates securities for other-than-temporary impairment on a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation. A roll-forward of the other-than-temporary impairment amount related to credit losses for the three and nine months ended September 30, 2016 and 2015 is as follows:
|  | 2016 |  |  | 2015 |
Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, beginning of period |  | $ | 4,054 |  |  | $ | 4,054 |
Credit losses previously recognized on securities sold during the period |  |  | (1,983 | ) |  |  | 0 |
Additional credit loss for which other-than-temporary impairment was not previously recognized |  |  | 0 |  |  |  | 0 |
Additional credit loss for which other-than-temporary impairment was previously recognized |  |  | 0 |  |  |  | 0 |
Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, end of period |  | $ | 2,071 |  |  | $ | 4,054 |
During the quarter ended June 30, 2016 the Corporation sold two structured pooled trust preferred securities which had been charged off in their entirety in prior periods. The original cost basis of these securities was $1,983 and the proceeds received totaled $922, which is reported in net realized gains on available-for-sale securities for the three and nine months ended September 30, 2016. Due to the insignificance of the Corporation’s adjusted amortized cost balance of the remaining structured pooled trust securities, no further disclosures are required. For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed, as appropriate given the following considerations. When reviewing securities for other-than-temporary impairment, management considers the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred. Management also considers the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. As of September 30, 2016 and December 31, 2015, management concluded that the securities described in the previous paragraph were not other-than-temporarily impaired for the following reasons:
| • |  | There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.
| • |  | All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.
The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis. Information pertaining to security sales on available for sale securities is as follows:
|  | Proceeds |  |  | Gross Gains |  |  | Gross Losses |
Three months ended September 30, 2016 |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Nine months ended September 30, 2016 |  |  | 4,420 |  |  |  | 1,005 |  |  |  | 0 |
Three months ended September 30, 2015 |  |  | 38,025 |  |  |  | 244 |  |  |  | (171 | )
Nine months ended September 30, 2015 |  |  | 86,554 |  |  |  | 852 |  |  |  | (288 | )
The following is a schedule of the contractual maturity of securities available for sale, excluding equity securities, at September 30, 2016:
|  | Amortized |  |  | Fair |
|  | Cost |  |  | Value |
1 year or less |  | $ | 41,920 |  |  | $ | 41,532 |
1 year – 5 years |  |  | 179,919 |  |  |  | 186,380 |
5 years – 10 years |  |  | 70,832 |  |  |  | 73,920 |
After 10 years |  |  | 17,135 |  |  |  | 18,261 |
|  |  | 309,806 |  |  |  | 320,093 |
Residential and multi-family mortgage |  |  | 137,639 |  |  |  | 139,022 |
Pooled SBA |  |  | 45,964 |  |  |  | 46,635 |
Total debt securities |  | $ | 493,409 |  |  | $ | 505,750 |
Mortgage and asset backed securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral. On September 30, 2016 and December 31, 2015, securities carried at $347,196 and $312,669, respectively, were pledged to secure public deposits and for other purposes as provided by law.

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