XML 27 R12.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Securities Available For Sale | 12 Months Ended
--- | ---
Dec. 31, 2016
Securities Available For Sale [Abstract] |
Securities Available For Sale | Note 3: Securities Available For Sale A summary of the amortized cost and market values of securities available for sale follows:
December 31, 2016 |  |  |  | Gross |  | Gross |  |
|  | Amortized |  | Unrealized |  | Unrealized |  | Estimated
Available for Sale: |  | Cost |  | Gains |  | Losses |  | Fair Value
Mortgage-backed securities: |  |  |  |  |  |  |  |
US Government-sponsored enterprises | $ | 330,635 | $ | 2,682 | $ | 4,865 | $ | 328,452
US Government agency |  | 76,722 |  | 797 |  | 613 |  | 76,906
Private label |  | 936 |  | 207 |  | 11 |  | 1,132
Obligations of states |  |  |  |  |  |  |  |
and political subdivisions thereof |  | 123,832 |  | 1,941 |  | 3,407 |  | 122,366
Total | $ | 532,125 | $ | 5,627 | $ | 8,896 | $ | 528,856
December 31, 2015 |  |  |  | Gross |  | Gross |  |
|  | Amortized |  | Unrealized |  | Unrealized |  | Estimated
Available for Sale: |  | Cost |  | Gains |  | Losses |  | Fair Value
Mortgage-backed securities: |  |  |  |  |  |  |  |
US Government-sponsored enterprises | $ | 304,106 | $ | 5,042 | $ | 2,155 | $ | 306,993
US Government agency |  | 78,408 |  | 1,269 |  | 547 |  | 79,130
Private label |  | 2,713 |  | 762 |  | 11 |  | 3,464
Obligations of states |  |  |  |  |  |  |  |
and political subdivisions thereof |  | 110,952 |  | 4,758 |  | 328 |  | 115,382
Total | $ | 496,179 | $ | 11,831 | $ | 3,041 | $ | 504,969
Securities Impairment: As a part of the Companys ongoing security monitoring process, the Company identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired. For the years ended December 31, 2016 and 2015, the Company did not record any OTTI losses. Despite still-elevated levels of delinquencies, defaults and losses in the underlying residential mortgage loan collateral, given credit enhancements resulting from the structures of the individual securities combined with OTTI write-downs recorded in prior periods, the Company currently expects that as of December 31, 2016, it will recover the amortized cost basis of its private-label mortgage-backed securities and has therefore concluded that such securities were not other-than-temporarily impaired as of that date. Nevertheless, given future market conditions, it is possible that adverse changes in repayment performance and fair value could occur in future periods that could impact the Company's current best estimates. The following table displays the beginning balance of OTTI related to historical credit losses on debt securities held by the Company at the beginning of the current reporting period as well as changes in estimated credit losses recognized in pre-tax earnings for the three years ended December 31, 2016.
|  | 2016 |  | 2015 |  | 2014
Estimated credit losses as of prior year-end, | $ | 3,180 | $ | 3,413 | $ | 3,923
Additions for credit losses for securities on which |  |  |  |  |  |
OTTI has been previously recognized |  | -- |  | -- |  | --
Additions for credit losses for securities on which |  |  |  |  |  |
OTTI has not been previously recognized |  | -- |  | -- |  | --
Reductions for securities sold or paid off during the period |  | 1,483 |  | 233 |  | 510
Estimated credit losses as of December 31, | $ | 1,697 | $ | 3,180 | $ | 3,413
Upon initial impairment of a security, total OTTI losses represent the excess of the amortized cost over the fair value. For subsequent impairments of the same security, total OTTI losses represent additional credit losses and or declines in fair value subsequent to the previously recorded OTTI losses, if applicable. Unrealized OTTI losses recognized in accumulated other comprehensive income ("OCI") represent the non-credit component of OTTI losses on debt securities. Net impairment losses recognized in earnings represent the credit component of OTTI losses on debt securities. As of December 31, 2016, the Company held four private label MBS (debt securities) with a total amortized cost (i.e. carrying value) of $42 for which OTTI losses have previously been recognized in pre-tax earnings dating back to the fourth quarter of 2008. For all of these securities, the Company previously recognized credit losses in excess of the unrealized losses in accumulated OCI, which contributed $130 to the net unrealized gain of $130, net of tax, as included in accumulated OCI as of December 31, 2016, compared with net unrealized gains of $462, net of tax, at December 31, 2015. As of December 31, 2016, based on a review of the remaining securities in the securities portfolio, the Company concluded that it expects to recover its amortized cost basis for such securities. This conclusion was based on the issuers' continued satisfaction of the securities obligations in accordance with their contractual terms and the expectation that they will continue to do so through the maturity of the security, the expectation that the Company will receive the entire amount of future contractual cash flows, as well as the evaluation of the fundamentals of the issuers' financial condition and other objective evidence. Accordingly, the Company concluded that the declines in the values of those securities were temporary and that any additional other-than-temporary impairment charges were not appropriate at December 31, 2016. As of that date, the Company did not intend to sell nor anticipated that it would more-likely-than-not that it would be required to sell any of its impaired securities, that is, where fair value is less than the cost basis of the security. The following tables summarize the fair value of securities with continuous unrealized losses for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or longer as of December 31, 2016 and 2015. All securities referenced are debt securities. At December 31, 2016 and 2015, the Company did not hold any common stock or other equity securities in its securities portfolio.
|  | Less than 12 months |  | 12 months or longer |  | Total
|  | Estimated |  |  |  |  | Estimated |  |  |  |  | Estimated |  |  |
December 31, 2016 |  | Fair | Number of |  | Unrealized |  | Fair | Number of |  | Unrealized |  | Fair | Number of |  | Unrealized
|  | Value | Investments |  | Losses |  | Value | Investments |  | Losses |  | Value | Investments |  | Losses
Description of Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Government- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises | $ | 197,914 | 257 | $ | 4,369 | $ | 10,120 | 23 | $ | 496 | $ | 208,034 | 280 | $ | 4,865
US Government agency |  | 36,941 | 54 |  | 472 |  | 4,263 | 15 |  | 141 |  | 41,204 | 69 |  | 613
Private label |  | 107 | 2 |  | -- |  | 312 | 7 |  | 11 |  | 419 | 9 |  | 11
Obligations of states and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
political subdivisions thereof |  | 76,803 | 151 |  | 3,252 |  | 3,916 | 9 |  | 155 |  | 80,719 | 160 |  | 3,407
Total | $ | 311,765 | 464 | $ | 8,093 | $ | 18,611 | 54 | $ | 803 | $ | 330,376 | 518 | $ | 8,896
|  | Less than 12 months |  | 12 months or longer |  | Total
|  | Estimated |  |  |  |  | Estimated |  |  |  |  | Estimated |  |  |
December 31, 2015 |  | Fair | Number of |  | Unrealized |  | Fair | Number of |  | Unrealized |  | Fair | Number of |  | Unrealized
|  | Value | Investments |  | Losses |  | Value | Investments |  | Losses |  | Value | Investments |  | Losses
Description of Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Government- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises | $ | 112,770 | 142 | $ | 1,342 | $ | 23,646 | 33 | $ | 813 | $ | 136,416 | 175 | $ | 2,155
US Government agency |  | 20,201 | 30 |  | 326 |  | 11,232 | 22 |  | 221 |  | 31,433 | 52 |  | 547
Private label |  | 235 | 2 |  | 2 |  | 178 | 5 |  | 9 |  | 413 | 7 |  | 11
Obligations of states and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
political subdivisions thereof |  | 14,853 | 25 |  | 210 |  | 3,700 | 11 |  | 118 |  | 18,553 | 36 |  | 328
Total | $ | 148,059 | 199 | $ | 1,880 | $ | 38,756 | 71 | $ | 1,161 | $ | 186,815 | 270 | $ | 3,041
For securities with unrealized losses, the following information was considered in determining that the impairments were not other-than-temporary: Mortgage-backed securities issued by U.S. Government-sponsored enterprises: As of December 31, 2016, the total unrealized losses on these securities amounted to $4,865, compared with unrealized losses of $2,155 at December 31, 2015. Aggregate unrealized losses represented 1.5% and 0.7% of securities in unrealized loss positions as of Decemeber 31, 2016 and 2015, respectively. The increase in unrealized losses was generally attributed to a lower interest rate environment at December 31, 2015 compared with December 31, 2016. All of these securities were credit rated "AA+" by the major credit rating agencies. Company management believes these securities have minimal credit risk, as these enterprises play a vital role in the nation's financial markets. Management's analysis indicates that the unrealized losses at December 31, 2016, were attributed to changes in current market yields and pricing spreads for similar securities since the date the underlying securities were purchased, and does not consider these securities to be other-than-temporarily impaired at December 31, 2016. Mortgage-backed securities issued by U.S. Government agencies: As of December 31, 2016, the total unrealized losses on these securities amounted to $613, compared with unrealized losses of $547 at December 31, 2015. Aggregate unrealized losses represented 0.8% and 0.7% of securities in unrealized loss positions as of December 31, 2016 and 2015, respectively. The increase in unrealized losses was generally attributed to a lower interest rate environment at December 31, 2015 compared with December 31, 2016. All of these securities were credit rated "AA+" by the major credit rating agencies. Management's analysis indicates that these securities bear little or no credit risk because they are backed by the full faith and credit of the United States. The Company attributes the unrealized losses at December 31, 2016 to changes in current market yields and pricing spreads for similar securities since the date the underlying securities were purchased, and does not consider these securities to be other-than- temporarily impaired at December 31, 2016. Private-label mortgage-backed securities: As of December 31, 2016 and 2015, the total unrealized losses on the Bank's private-label mortgage-backed securities amounted to $11. Aggregate unrealized losses represented 1.2% and 0.4% of securities in unrealized loss positions as of December 31, 2016 and 2015, respectively. The Company attributes the unrealized losses at December 31, 2015, to the current illiquid market for non-agency mortgage-backed securities, risk-related market pricing discounts for non-agency mortgage-backed securities and credit rating downgrades on certain private-label MBS owned by the Company. Based upon the foregoing considerations, and the expectation that the Company will receive all of the future contractual cash flows related to the amortized cost on these securities, the Company does not consider there to be any additional other-than-temporary impairment with respect to these securities at December 31, 2016. Obligations of states and political subdivisions thereof: As of December 31, 2016, the total unrealized losses on the Bank's municipal securities amounted to $3,407, compared with $328 at December 31, 2015. Aggregate unrealized losses represented 2.8% and 0.3% of securities in unrealized loss positions as of December 31, 2016 and 2015, respectively. The increase in unrealized losses was generally attributed to a higher interest rate environment at December 31, 2016 compared with December 31, 2015. The Bank's municipal securities primarily consist of general obligation bonds and to a lesser extent, revenue bonds. General obligation bonds carry less risk, as they are supported by the full faith, credit and taxing authority of the issuing government and in the cases of school districts, are additionally supported by state aid. Revenue bonds are generally backed by municipal revenue streams generated through user fees or lease payments associated with specific municipal projects that have been financed. Municipal bonds are frequently supported with insurance, which guarantees that in the event the issuer experiences financial problems, the insurer will step in and assume payment of both principal and interest. Historically, insurance support has strengthened an issuer's underlying credit rating to AAA or AA status. Starting in 2008 and continuing through 2016, many of the insurance companies providing municipal bond insurance experienced financial difficulties and, accordingly, were downgraded by at least one of the major credit rating agencies. Consequently, since 2008 a portion of the Bank's municipal bond portfolio was downgraded by at least one of the major credit rating agencies. Notwithstanding the credit rating downgrades, at December 31, 2016, the Bank's municipal bond portfolio did not contain any below investment grade securities as reported by major credit rating agencies. In addition, at December 31, 2016, all municipal bond issuers were current on contractually obligated interest and principal payments. The Company attributes the unrealized losses at December 31, 2016, to changes in credit ratings on certain securities and resulting changes in prevailing market yields and pricing spreads since the date the underlying securities were purchased. The Company also attributes the unrealized losses to ongoing media attention and market concerns about municipal budget deficits and the prolonged recovery from the national economic recession and the impact they might have on the future financial stability of municipalities throughout the country. Notwithstanding the foregoing considerations, the Company does not consider these municipal securities to be other-than-temporarily impaired at December 31, 2016. At December 31, 2016, the Company had no intent to sell nor believed it is more-likely-than-not that it would be required to sell any of its impaired securities as identified and discussed immediately above, and therefore did not consider these securities to be other-than-temporarily impaired as of that date. Maturity Distribution: The following table summarizes the maturity distribution of the amortized cost and estimated fair value of securities available for sale as of December 31, 2016.
|  | Amortized |  | Estimated
Securities Available for Sale |  | Cost |  | Fair Value
Due one year or less | $ | 134 | $ | 134
Due after one year through five years |  | 6,230 |  | 6,283
Due after five years through ten years |  | 17,482 |  | 17,722
Due after ten years |  | 508,279 |  | 504,717
Total | $ | 532,125 | $ | 528,856
Actual maturities may differ from the final contractual maturities depicted above because of securities call or prepayment provisions with or without call or prepayment penalties. The contractual maturity of mortgage-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Monthly pay downs on mortgage-backed securities cause the average lives of the securities to be much different than their stated lives. Mortgage-backed securities are allocated among the maturity groupings based on their final maturity dates. Realized Securities Gains and Losses: The following table summarizes realized gains and losses and other than temporary impairment losses on securities available for sale for the years ended December 31, 2016, 2015 and 2014.
|  | Proceeds |  |  |  |  |  |
|  | from Sale of |  |  |  |  |  |
|  | Securities |  |  |  |  |  |
|  | Available |  | Realized |  | Realized |  |
|  | for Sale |  | Gains |  | Losses |  | Net
2016 | $ | 66,583 | $ | 4,498 | $ | -- | $ | 4,498
2015 |  | 22,753 |  | 1,334 |  | -- |  | 1,334
2014 |  | 37,278 |  | 809 |  | 406 |  | 403
Visa Class B Common Shares: The Bank was a member of the Visa USA payment network and was issued Class B shares in connection with the Visa Reorganization and the Visa Inc. initial public offering in March 2008. The Visa Class B shares are transferable only under limited circumstances until they can be converted into shares of the publicly traded class of Visa stock. This conversion cannot happen until the settlement of certain litigation, which is indemnified by Visa members. Since its initial public offering, Visa has funded a litigation reserve based upon a change in the conversion ratio of Visa Class B shares into Visa Class A shares. At its discretion, Visa may continue to increase the conversion rate in connection with any settlements in excess of amounts then in escrow for that purpose and reduce the conversion rate to the extent that it adds any funds to the escrow in the future. Based on the existing transfer restriction and the uncertainty of the litigation, the Company has recorded its Visa Class B shares on its statements of condition at zero value for all reporting periods since 2008. At December 31, 2016, the Bank owned 11,623 of Visa Class B shares with a then current conversion ratio to Visa Class A shares of 1.648 (or 19,158 Visa Class A shares). Upon termination of the existing transfer restriction and settlement of the litigation, and to the extent that the Bank continues to own such Visa Class B shares in the future, the Company expects to record its Visa Class B shares at fair value.

X
- References No definition available. + Details
Name: | us-gaap_AvailableForSaleSecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27337-111563 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27198-111563 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62586-112803 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27161-111563 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27357-111563 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27290-111563 + Details
Name: | us-gaap_AvailableForSaleSecuritiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration