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Note 4 - Investment Securities Available-for-Sale
 9 Months Ended
Sep. 30, 2014
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 4. Investment Securities Available-for-Sale


Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:


           

Gross

   

Gross

   

Estimated

 

September 30, 2014

 

Amortized

   

Unrealized

   

Unrealized

   

Fair

 

(dollars in thousands)

 

Cost

   

Gains

   

Losses

   

Value

 

U. S. Government agency securities

  $ 38,636     $ 545     $ 97     $ 39,084  

Residential mortgage backed securities

    227,525       1,328       3,724       225,129  

Municipal bonds

    113,390       4,716       250       117,856  

Other equity investments

    396       3       -       399  
    $ 379,947     $ 6,592     $ 4,071     $ 382,468  

           

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


   

Less than

   

12 Months

                 
   

12 Months

   

or Greater

   

Total

 
   

Estimated

           

Estimated

           

Estimated

         

September 30, 2014

 

Fair

   

Unrealized

   

Fair

   

Unrealized

   

Fair

   

Unrealized

 

(dollars in thousands)

 

Value

   

Losses

   

Value

   

Losses

   

Value

   

Losses

 

U. S. Government agency securities

  $ 4,005     $ 16     $ 4,702     $ 81     $ 8,707     $ 97  

Residential mortgage backed securities

    55,857       311       96,923       3,413       152,780       3,724  

Municipal bonds

    3,309       3       17,952       247       21,261       250  
    $ 63,171     $ 330     $ 119,577     $ 3,741     $ 182,748     $ 4,071  

   

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  

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 4.1 years. 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 September 30, 2014 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 maturity. In addition, at September 30, 2014, the Company held $10.7 million in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and are not marketable.


The amortized cost and estimated fair value of investments available-for-sale by contractual maturity are shown in the table 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.


   

September 30, 2014

   

December 31, 2013

 
   

Amortized

   

Estimated

   

Amortized

   

Estimated

 

(dollars in thousands)

 

Cost

   

Fair Value

   

Cost

   

Fair Value

 

U. S. Government agency securities maturing:

                               

One year or less

  $ 3,000     $ 2,981     $ 19,025     $ 19,133  

After one year through five years

    29,152       29,565       27,615       28,202  

Five years through ten years

    6,484       6,538       -       -  

Residential mortgage backed securities

    227,525       225,129       234,206       228,674  

Municipal bonds maturing:

                               

One year or less

    2,846       2,876       25,718       26,008  

After one year through five years

    46,404       48,757                  

Five years through ten years

    62,682       64,649       76,705       75,732  

Ten years through fifteen years

    1,458       1,574       -       -  

Other equity investments

    396       399       396       384  
    $ 379,947     $ 382,468     $ 383,665     $ 378,133  

The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at September 30, 2014 was $262.5 million. As of September 30, 2014 and December 31, 2013, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. Government agency securities that exceeded ten percent of shareholders’ equity.