Note 3.

Investment Securities

The following tables present the amortized cost and aggregate fair value of available-for-sale securities, including gross unrealized gains and losses, as of the dates indicated:


	December 31, 2015
(Amounts in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Agency securities	$	31,414	$	39	$	(751	)	$	30,702
Municipal securities		124,880		4,155		(357	)		128,678
Single issue trust preferred securities		55,882		—		(8,050	)		47,832
Corporate securities		70,571		—		(238	)		70,333
Certificates of deposit		5,000		—		—			5,000
Mortgage-backed Agency securities		84,576		155		(1,175	)		83,556
Equity securities		66		6		—			72

Total	$	372,389	$	4,355	$	(10,571	)	$	366,173


	December 31, 2014
(Amounts in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Agency securities	$	34,604	$	11	$	(1,017	)	$	33,598
Municipal securities		134,784		4,823		(692	)		138,915
Single issue trust preferred securities		55,822		—		(9,685	)		46,137
Corporate securities		5,000		109		—			5,109
Mortgage-backed Agency securities		102,506		470		(857	)		102,119
Equity securities		226		19		(6	)		239

Total	$	332,942	$	5,432	$	(12,257	)	$	326,117

The following table presents the amortized cost and fair value of available-for-sale securities, by contractual maturity, as of December 31, 2015. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.


(Amounts in thousands)	U.S. Agency Securities		Municipal Securities		Corporate Notes		Certificates of Deposit		Total
Amortized cost maturity:
One year or less	$	—	$	1,100	$	70,571	$	5,000	$	76,671
After one year through five years		2		2,567		—		—		2,569
After five years through ten years		2,997		80,882		—		—		83,879
After ten years		28,415		40,331		55,882		—		124,628

Amortized cost	$	31,414	$	124,880	$	126,453	$	5,000		287,747

Mortgage-backed securities										84,576
Equity securities										66

Total amortized cost									$	372,389

Fair value maturity:
One year or less	$	—	$	1,123	$	70,333	$	5,000	$	76,456
After one year through five years		2		2,602		—		—		2,604
After five years through ten years		2,995		84,322		—		—		87,317
After ten years		27,705		40,631		47,832		—		116,168

Fair value	$	30,702	$	128,678	$	118,165	$	5,000		282,545

Mortgage-backed securities										83,556
Equity securities										72

Total fair value									$	366,173

The following tables present the amortized cost and aggregate fair value of held-to-maturity securities, including gross unrealized gains and losses, as of the dates indicated:


	December 31, 2015
(Amounts in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Agency securities	$	61,863	$	75	$	(106	)	$	61,832
Municipal securities		190		3		—			193
Corporate securities		10,488		—		(23	)		10,465

Total	$	72,541	$	78	$	(129	)	$	72,490


	December 31, 2014
(Amounts in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Agency securities	$	46,987	$	22	$	(54	)	$	46,955
Municipal securities		379		7		—			386
Corporate securities		10,582		—		(34	)		10,548

Total	$	57,948	$	29	$	(88	)	$	57,889

The following table presents the amortized cost and fair value of held-to-maturity securities, by contractual maturity, as of December 31, 2015. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.


(Amounts in thousands)	U.S. Agency Securities		Municipal Securities		Corporate Notes		Total
Amortized cost maturity:
One year or less	$	25,058	$	190	$	—	$	25,248
After one year through five years		36,805		—		10,488		47,293
After five years through ten years		—		—		—		—
After ten years		—		—		—		—

Total amortized cost	$	61,863	$	190	$	10,488	$	72,541

Fair value maturity:
One year or less	$	25,007	$	193	$	—	$	25,200
After one year through five years		36,825		—		10,465		47,290
After five years through ten years		—		—		—		—
After ten years		—		—		—		—

Total fair value	$	61,832	$	193	$	10,465	$	72,490

The following tables present municipal securities, by state, for the states where the largest volume of these securities are held in the Company’s portfolio. The tables also present the amortized cost and fair value of the municipal securities, including gross unrealized gains and losses, as of the dates indicated.


	December 31, 2015
(Amounts in thousands)	Percent of Municipal Portfolio			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
New York		11.38	%	$	14,062	$	602	$	—		$	14,664
Ohio		8.72	%		11,011		283		(64	)		11,230
Minnesota		8.69	%		10,797		420		(14	)		11,203
New Jersey		8.38	%		10,416		388		—			10,804
Wisconsin		7.76	%		9,786		217		(5	)		9,998
Massachusetts		7.69	%		9,554		378		(22	)		9,910
Connecticut		7.60	%		9,479		315		—			9,794
Texas		6.04	%		7,651		208		(75	)		7,784
Iowa		5.03	%		6,471		75		(60	)		6,486
Other		28.71	%		35,843		1,272		(117	)		36,998

Total		100.00	%	$	125,070	$	4,158	$	(357	)	$	128,871


	December 31, 2014
(Amounts in thousands)	Percent of Municipal Portfolio			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
New York		11.48	%	$	14,064	$	730	$	—		$	14,794
Minnesota		9.02	%		11,188		463		(30	)		11,621
Wisconsin		8.98	%		11,340		244		(16	)		11,568
Ohio		8.79	%		11,145		337		(148	)		11,334
Connecticut		8.67	%		10,775		393		—			11,168
New Jersey		8.60	%		10,567		515		—			11,082
Massachusetts		7.77	%		9,653		393		(38	)		10,008
Texas		6.87	%		8,770		214		(133	)		8,851
Other		37.93	%		47,661		1,541		(327	)		48,875

Total		108.09	%	$	135,163	$	4,830	$	(692	)	$	139,301

The following tables present the fair values and unrealized losses for available-for-sale securities in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of the dates indicated:


	December 31, 2015
	Less than 12 Months					12 Months or longer					Total
(Amounts in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Agency securities	$	4,441	$	(5	)	$	23,922	$	(746	)	$	28,363	$	(751	)
Municipal securities		8,126		(48	)		10,393		(309	)		18,519		(357	)
Single issue trust preferred securities		—		—			47,832		(8,050	)		47,832		(8,050	)
Corporate securities		70,333		(238	)		—		—			70,333		(238	)
Mortgage-backed Agency securities		27,050		(253	)		37,291		(922	)		64,341		(1,175	)

Total	$	109,950	$	(544	)	$	119,438	$	(10,027	)	$	229,388	$	(10,571	)


	December 31, 2014
	Less than 12 Months					12 Months or longer					Total
(Amounts in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Agency securities	$	—	$	—		$	29,448	$	(1,017	)	$	29,448	$	(1,017	)
Municipal securities		1,112		(8	)		25,007		(684	)		26,119		(692	)
Single issue trust preferred securities		—		—			46,137		(9,685	)		46,137		(9,685	)
Mortgage-backed Agency securities		2,778		(3	)		45,790		(854	)		48,568		(857	)
Equity securities		150		(6	)		—		—			150		(6	)

Total	$	4,040	$	(17	)	$	146,382	$	(12,240	)	$	150,422	$	(12,257	)

The following tables present the fair values and unrealized losses for held-to-maturity securities in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of the date indicated.


	December 31, 2015
	Less than 12 Months					12 Months or longer				Total
(Amounts in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Agency securities	$	43,723	$	(106	)	$	—	$	—	$	43,723	$	(106	)
Corporate securities		6,851		(23	)		—		—		6,851		(23	)

Total	$	50,574	$	(129	)	$	—	$	—	$	50,574	$	(129	)


	December 31, 2014
	Less than 12 Months					12 Months or longer				Total
(Amounts in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Agency securities	$	28,188	$	(54	)	$	—	$	—	$	28,188	$	(54	)
Corporate securities		10,548		(34	)		—		—		10,548		(34	)

Total	$	38,736	$	(88	)	$	—	$	—	$	38,736	$	(88	)

As of December 31, 2015, there were 107 individual securities in an unrealized loss position, and their combined depreciation in value represented 2.44% of the investment securities portfolio. Individual securities in an unrealized loss position as of December 31, 2015, included 48 securities in a continuous unrealized loss position for 12 months or longer that the Company does not intend to sell, and that it has determined is not more likely than not going to be required to sell, prior to maturity or recovery. As of December 31, 2014, there were 97 individual securities in an unrealized loss position, and their combined depreciation in value represented 3.21% of the investment securities portfolio.

The following table presents the proceeds from sales of available-for-sale securities and the gross realized gains and losses on those sales in the periods indicated:


	Year Ended December 31,
(Amounts in thousands)	2015			2014			2013
Gross realized gains	$	363		$	2,257		$	553
Gross realized losses		(219	)		(3,642	)		(154	)

Net gain (loss) on sale of securities	$	144		$	(1,385	)	$	399

The carrying amount of securities pledged for various purposes totaled $236.73 million as of December 31, 2015, and $268.78 million as of December 31, 2014.

The Company reviews its investment portfolio quarterly for indications of OTTI. Debt securities not beneficially owned by the Company include securities issued from the U.S. Department of the Treasury (“Treasury”), municipal securities, single issue trust preferred securities, corporate securities, and certificates of deposit. For debt securities not beneficially owned, the Company analyzes factors such as the severity and duration of the impairment, adverse conditions within the issuing industry, prospects for the issuer, performance of the security, changes in rating by rating agencies, and other qualitative factors to determine if the impairment will be recovered. If the evaluation suggests that the impairment will not be recovered, the Company calculates the present value of the security to determine the amount of OTTI. The security is then written down to its current present value and the Company calculates and records the amount of the loss due to credit factors in earnings through noninterest income and the amount due to other factors in stockholders’ equity through OCI. Temporary impairment on these securities is primarily related to changes in benchmark interest rates, changes in pricing in the credit markets, destabilization in foreign markets, and other current economic factors. The Company incurred no OTTI charges related to debt securities not beneficially owned in 2015 or 2014.

Debt securities beneficially owned by the Company consist of mortgage-backed securities (“MBS”). For debt securities beneficially owned, the Company analyzes the cash flows for each applicable security to determine if an adverse change in cash flows expected to be collected has occurred. If the projected value of cash flows at the current reporting date is less than the present value previously projected, and less than the current book value, an adverse change has occurred. The Company then compares the current present value of cash flows to the current net book value to determine the credit-related portion of the OTTI. The credit-related OTTI is recorded in earnings through noninterest income and any remaining noncredit-related OTTI is recorded in stockholders’ equity through OCI. The Company incurred no credit-related OTTI charges related to debt securities beneficially owned in 2015. The Company incurred credit-related OTTI charges related to debt securities beneficially owned of $705 thousand in 2014 and $320 thousand in 2013. These charges were associated with a non-Agency MBS that was sold in November 2014.

The following table presents the activity for credit-related losses recognized in earnings on debt securities where a portion of an OTTI was recognized in OCI for the periods indicated:


	Year Ended December 31,
(Amounts in thousands)	2015		2014			2013
Beginning balance ⁽¹⁾	$	—	$	7,798		$	7,478
Additions for credit losses on securities previously recognized		—		705			320
Reduction for securities sold/realized losses		—		(8,503	)		—

Ending balance	$	—	$	—		$	7,798

(1)	The beginning balance includes credit related losses included in OTTI charges recognized on debt securities in prior periods.

For equity securities, the Company considers its intent to hold or sell the security before recovery, the severity and duration of the decline in fair value of the security below its cost, the financial condition and near-term prospects of the issuer, and whether the decline appears to be related to issuer, general market, or industry conditions to determine if the impairment will be recovered. If the Company deems the impairment other-than-temporary in nature, the security is written down to its current present value and the OTTI loss is charged to earnings. The Company incurred no OTTI charges related to equity securities in 2015 or 2013. The Company incurred OTTI charges related to equity securities of $32 thousand in 2014.