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Note 3 - Investment Securities Available for Sale
 12 Months Ended
Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3 - Investment Securities Available-for-Sale


The amortized cost and estimated fair values of investments available-for-sale at December 31, 2013 and 2012 are as follows:


           

Gross

   

Gross

   

Estimated

 

December 31, 2013

 

Amortized

   

Unrealized

   

Unrealized

   

Fair

 

(dollars in thousands)

 

Cost

   

Gains

   

Losses

   

Value

 

U. S. Government agency securities

  $ 46,640     $ 843     $ 148     $ 47,335  

Residential mortgage backed securities

    234,206       1,143       6,675       228,674  

Municipal bonds

    102,423       2,017       2,700       101,740  

Other equity investments

    396       -       12       384  
    $ 383,665     $ 4,003     $ 9,535     $ 378,133  

           

Gross

   

Gross

   

Estimated

 

December 31, 2012

 

Amortized

   

Unrealized

   

Unrealized

   

Fair

 

(dollars in thousands)

 

Cost

   

Gains

   

Losses

   

Value

 

U. S. Government agency securities

  $ 47,606     $ 1,477     $ 1     $ 49,082  

Residential mortgage backed securities

    170,649       2,730       296       173,083  

Municipal bonds

    72,050       5,314       51       77,313  

Other equity investments

    407       -       65       342  
    $ 290,712     $ 9,521     $ 413     $ 299,820  

The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 4.3 years. The gross unrealized loss on other equity investments represents common stock of one local banking company owned by the Company, and traded on a broker “bulletin board” exchange. The estimated fair value is determined by broker quoted prices. The unrealized loss is deemed a result of generally weak valuations for many smaller community bank stocks. The individual banking company is profitable, has good financial trends and has a satisfactory capital position. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of December 31, 2013 represent an other-than-temporary impairment for the reasons noted. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity. In addition, at December 31, 2013, the Company held $11.3 million in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are held for regulatory purposes and are not marketable.


Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2013 and 2012 are as follows:


   

Less than

   

12 Months

                 
   

12 Months

   

or Greater

   

Total

 
   

Estimated

           

Estimated

           

Estimated

         

December 31, 2013

 

Fair

   

Unrealized

   

Fair

   

Unrealized

   

Fair

   

Unrealized

 

(dollars in thousands)

 

Value

   

Losses

   

Value

   

Losses

   

Value

   

Losses

 

U. S. Government agency securities

  $ 4,782     $ 148     $ -     $ -     $ 4,782     $ 148  

Residential mortgage backed securities

    155,475       5,992       15,658       683       171,133       6,675  

Municipal bonds

    50,450       2,512       3,196       188       53,646       2,700  

Other equity investments

    -       -       165       12       165       12  
    $ 210,707     $ 8,652     $ 19,019     $ 883     $ 229,726     $ 9,535  

   

Less than

   

12 Months

                 
   

12 Months

   

or Greater

   

Total

 
   

Estimated

           

Estimated

           

Estimated

         

December 31, 2012

 

Fair

   

Unrealized

   

Fair

   

Unrealized

   

Fair

   

Unrealized

 

(dollars in thousands)

 

Value

   

Losses

   

Value

   

Losses

   

Value

   

Losses

 

U. S. Government agency securities

  $ 2,999     $ 1     $ -     $ -     $ 2,999     $ 1  

Residential mortgage backed securities

    44,992       263       2,743       33       47,735       296  

Municipal bonds

    3,964       51       -       -       3,964       51  

Other equity investments

    -       -       112       65       112       65  
    $ 51,955     $ 315     $ 2,855     $ 98     $ 54,810     $ 413  

The amortized cost and estimated fair values of investments available-for-sale at December 31, 2013 and 2012 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 


   

December 31, 2013

   

December 31, 2012

 
   

Amortized

   

Estimated

   

Amortized

   

Estimated

 

(dollars in thousands)

 

Cost

   

Fair Value

   

Cost

   

Fair Value

 

U. S. Government agency securities maturing:

                               

One year or less

  $ 19,025     $ 19,133     $ 5,038     $ 5,053  

After one year through five years

    27,615       28,202       42,568       44,029  

Residential mortgage backed securities

    234,206       228,674       170,649       173,083  

Municipal bonds maturing:

                               

After one year through five years

    25,718       26,008       11,469       11,978  

Five years through ten years

    76,705       75,732       60,581       65,335  

Other equity investments

    396       384       407       342  
    $ 383,665     $ 378,133     $ 290,712     $ 299,820  

In 2013, gross realized gains on sales of investment securities were $237 thousand and gross realized losses on sales of investment securities were $218 thousand. In 2012, gross realized gains on sales of investment securities were $941 thousand and gross realized losses on sales of investment securities were $251 thousand. In 2011, realized gains on sales of investment securities were $1.4 million and there were no realized losses on sales of investment securities.


Proceeds from sales and calls of investment securities in 2013 were $22.1 million, in 2012 were $77.1 million, and in 2011 were $85.9 million.


At December 31, 2013, $274.2 million (fair value) of securities were pledged as collateral for certain government deposits, and securities sold under agreement to repurchase. The outstanding balance of no single issuer, except for U.S. Government and U.S. Government agency securities, exceeded ten percent of shareholders’ equity at December 31, 2013 or 2012.