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INVESTMENT SECURITIES | 6 Months Ended
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Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES |
NOTE 2 – INVESTMENT SECURITIES
Investment Portfolio Composition. The amortized cost and related market value of investment securities available-for-sale and
held-to-maturity were as follows:
| June 30, 2018 |  |  | December 31, 2017
| Amortized | Unrealized | Unrealized | Market | Amortized | Unrealized | Unrealized | Market
| Cost |  | Gains |  | Losses |  | Value |  | Cost |  | Gain |  | Losses |  | Value
Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government Treasury | $ | 262,471 |  | $ | 12 |  | $ | 3,745 |  | $ | 258,738 |  | $ | 237,505 |  | $ | - |  | $ | 2,164 |  | $ | 235,341
U.S. Government Agency |  | 159,906 |  |  | 656 |  |  | 653 |  |  | 159,909 |  |  | 144,324 |  |  | 727 |  |  | 407 |  |  | 144,644
States and Political Subdivisions |  | 66,348 |  |  | 1 |  |  | 218 |  |  | 66,131 |  |  | 91,533 |  |  | 2 |  |  | 378 |  |  | 91,157
Mortgage-Backed Securities |  | 940 |  |  | 58 |  |  | - |  |  | 998 |  |  | 1,102 |  |  | 83 |  |  | - |  |  | 1,185
Equity Securities(1) |  | 7,886 |  |  | - |  |  | - |  |  | 7,886 |  |  | 8,584 |  |  | - |  |  | - |  |  | 8,584
Total | $ | 497,551 |  | $ | 727 |  | $ | 4,616 |  | $ | 493,662 |  | $ | 483,048 |  | $ | 812 |  | $ | 2,949 |  | $ | 480,911
Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government Treasury | $ | 50,124 |  | $ | - |  | $ | 668 |  | $ | 49,456 |  | $ | 98,256 |  | $ | - |  | $ | 441 |  | $ | 97,815
States and Political Subdivisions |  | 6,621 |  |  | - |  |  | 32 |  |  | 6,589 |  |  | 6,996 |  |  | - |  |  | 41 |  |  | 6,955
Mortgage-Backed Securities |  | 180,019 |  |  | 165 |  |  | 3,050 |  |  | 177,134 |  |  | 111,427 |  |  | 22 |  |  | 1,212 |  |  | 110,237
Total | $ | 236,764 |  | $ | 165 |  | $ | 3,750 |  | $ | 233,179 |  | $ | 216,679 |  | $ | 22 |  | $ | 1,694 |  | $ | 215,007
Total Investment Securities | $ | 734,315 |  | $ | 892 |  | $ | 8,366 |  | $ | 726,841 |  | $ | 699,727 |  | $ | 834 |  | $ | 4,643 |  | $ | 695,918
(1) Includes Federal Home Loan Bank and Federal Reserve Bank stock, recorded at cost of $3.1 million, $4.8 million, respectively, at June 30, 2018 and includes Federal Home Loan Bank, Federal Reserve Bank and FNBB Inc. stock recorded at cost of $3.1 million, $4.8 million, and $0.8 million, respectively, at December 31, 2017. Securities with an amortized cost of $247.1 million and $328.1 million at June 30, 2018 and December 31, 2017, respectively, were pledged to secure public deposits and for other purposes. The Bank, as a member of the Federal Home Loan Bank of Atlanta (“FHLB”), is required to own capital stock in the FHLB based generally upon the balances of residential and commercial real estate loans, and FHLB advances. FHLB stock which is included in equity securities is pledged to secure FHLB advances. No ready ma rket exists for this stock, and it has no quoted market value; however, redemption of this stock has historically been at par value. As a member of the Federal Reserve Bank of Atlanta, the Bank is required to maintain stock in the Federal Reserve Bank of Atlanta based on a specified ratio relative to the Bank’s capital. Federal Reserve Bank stock is carried at cost. Maturity Distribution. At June 30, 2018, the Company's investment securities had the following maturity distribution based on contractual ma turity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. Mortgage-backed securities and certain amortizing U.S. government agency securities are shown separately because they a re not due at a certain maturity date.
| Available for Sale |  | Held to Maturity
(Dollars in Thousands) | Amortized Cost |  | Market Value |  | Amortized Cost |  | Market Value
Due in one year or less | $ | 92,474 |  | $ | 92,106 |  | $ | 16,635 |  | $ | 16,617
Due after one year through five years |  | 264,809 |  |  | 260,934 |  |  | 40,110 |  |  | 39,428
Mortgage-Backed Securities |  | 940 |  |  | 998 |  |  | 180,019 |  |  | 177,134
U.S. Government Agency |  | 131,442 |  |  | 131,738 |  |  | - |  |  | -
Equity Securities |  | 7,886 |  |  | 7,886 |  |  | - |  |  | -
Total | $ | 497,551 |  | $ | 493,662 |  | $ | 236,764 |  | $ | 233,179
Unrealized Losses on Investment Securities. The following table summarizes the investment securities with unrealized losses aggregated by major security type and length of time in a continuous unrealized loss position:
| Less Than |  | Greater Than |  |  |  |  |  |
| 12 Months |  | 12 Months |  | Total
| Market |  | Unrealized |  | Market |  | Unrealized |  | Market |  | Unrealized
(Dollars in Thousands) | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government Treasury | $ | 146,449 |  | $ | 2,127 |  | $ | 97,386 |  | $ | 1,618 |  | $ | 243,835 |  | $ | 3,745
U.S. Government Agency |  | 67,628 |  |  | 377 |  |  | 25,212 |  |  | 276 |  |  | 92,840 |  |  | 653
States and Political Subdivisions |  | 54,511 |  |  | 176 |  |  | 5,079 |  |  | 42 |  |  | 59,590 |  |  | 218
Mortgage-Backed Securities |  | 2 |  |  | - |  |  | - |  |  | - |  |  | 2 |  |  | -
Total |  | 268,590 |  |  | 2,680 |  |  | 127,677 |  |  | 1,936 |  |  | 396,267 |  |  | 4,616
Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government Treasury |  | 24,574 |  |  | 489 |  |  | 24,882 |  |  | 179 |  |  | 49,456 |  |  | 668
States and Political Subdivisions |  | 6,093 |  |  | 25 |  |  | 496 |  |  | 7 |  |  | 6,589 |  |  | 32
Mortgage-Backed Securities |  | 108,323 |  |  | 1,742 |  |  | 29,894 |  |  | 1,308 |  |  | 138,217 |  |  | 3,050
Total | $ | 138,990 |  | $ | 2,256 |  | $ | 55,272 |  | $ | 1,494 |  | $ | 194,262 |  | $ | 3,750
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government Treasury | $ | 155,443 |  | $ | 963 |  | $ | 79,900 |  | $ | 1,201 |  | $ | 235,343 |  | $ | 2,164
U.S. Government Agency |  | 45,737 |  |  | 150 |  |  | 25,757 |  |  | 257 |  |  | 71,494 |  |  | 407
States and Political Subdivisions |  | 82,999 |  |  | 320 |  |  | 5,549 |  |  | 58 |  |  | 88,548 |  |  | 378
Mortgage-Backed Securities |  | 2 |  |  | - |  |  | - |  |  | - |  |  | 2 |  |  | -
Total |  | 284,181 |  |  | 1,433 |  |  | 111,206 |  |  | 1,516 |  |  | 395,387 |  |  | 2,949
Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government Treasury |  | 77,861 |  |  | 298 |  |  | 14,939 |  |  | 143 |  |  | 92,800 |  |  | 441
States and Political Subdivisions |  | 6,955 |  |  | 41 |  |  | - |  |  | - |  |  | 6,955 |  |  | 41
Mortgage-Backed Securities |  | 56,030 |  |  | 469 |  |  | 30,216 |  |  | 743 |  |  | 86,246 |  |  | 1,212
Total | $ | 140,846 |  | $ | 808 |  | $ | 45,155 |  | $ | 886 |  | $ | 186,001 |  | $ | 1,694
Management evaluates securities for other than temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Declines in the fair value of available-for-sale (“AFS”) and held-to-maturity (“HTM”) securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, the Company considers, (i) whether it has decided to sell the security, (ii) whether it is more likely than not that the Company will have to sell the security before its market value recovers, and (iii) whether the present value of expected cash flows is sufficient to recover the entire amortized cost basis. When assessing a security’s expected cash flows, the Company considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost and (ii) the financial condition and near-term prospects of the issuer. In analyzing an issuer’s financia l condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by rating agencies have occurred, regulatory issues, and analysts’ reports. At June 30, 2018, there were 535 positions (combi ned AFS and HTM) with unrealized losses totaling $8.4 million. 61 of these positions were U.S. government treasury securities guaranteed by the U.S. government. 276 of these positions were U.S. government agency and mortgage-backed securities issued by U.S. government sponsored entities, with the remaining 198 positions being municipal securities. B ecause the declines in the market value of these securities are attributable to changes in interest rates and not credit quality and because the Company has the present ability and intent to hold these investments until there is a recovery in fair value, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2018.

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