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Securities | 9 Months Ended
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Sep. 30, 2017
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported, net of tax, in other comprehensive income (loss). Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Declines in the fair value of held to maturity and available for sale 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 on debt securities, management considers (1) whether management intends to sell the security, or (2) if it is more likely than not that management will be required to sell the security before recovery, or (3) if management does not expect to recover the entire amortized cost basis. In assessing potential other-than-temporary impairment for equity securities, consideration is given to management’s intention and ability to hold the securities until recovery of unrealized losses. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Amortized cost and fair value of securities at September 30, 2017, and December 31, 2016, were as follows:
In thousands |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
SECURITIES AVAILABLE FOR SALE |  |  |  |  |  |  |  |  |  |  |  |
SEPTEMBER 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 99,999 |  |  | $ | 37 |  |  | $ | 1,022 |  |  | $ | 99,014 |
Mortgage-backed securities, residential |  | 36,673 |  |  | 705 |  |  | 27 |  |  | 37,351 |
State and municipal |  | 14,967 |  |  | 160 |  |  | 11 |  |  | 15,116 |
Corporate bonds |  | 5,000 |  |  | 112 |  |  | — |  |  | 5,112 |
CRA mutual fund |  | 1,044 |  |  | — |  |  | 2 |  |  | 1,042 |
Stock in other banks |  | 647 |  |  | 110 |  |  | — |  |  | 757 |
|  | $ | 158,330 |  |  | $ | 1,124 |  |  | $ | 1,062 |  |  | $ | 158,392 |
DECEMBER 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 81,065 |  |  | $ | 43 |  |  | $ | 1,529 |  |  | $ | 79,579 |
Mortgage-backed securities, residential |  | 31,272 |  |  | 782 |  |  | 81 |  |  | 31,973 |
State and municipal |  | 24,514 |  |  | 240 |  |  | 94 |  |  | 24,660 |
Corporate bonds |  | 5,000 |  |  | 62 |  |  | — |  |  | 5,062 |
CRA mutual fund |  | 1,044 |  |  | — |  |  | 9 |  |  | 1,035 |
Stock in other banks |  | 498 |  |  | 183 |  |  | — |  |  | 681 |
|  | $ | 143,393 |  |  | $ | 1,310 |  |  | $ | 1,713 |  |  | $ | 142,990 |
SECURITIES HELD TO MATURITY |  |  |  |  |  |  |  |  |  |  |  |
SEPTEMBER 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 20,004 |  |  | $ | 25 |  |  | $ | 54 |  |  | $ | 19,975 |
Mortgage-backed securities, residential |  | 27,365 |  |  | 156 |  |  | 123 |  |  | 27,398 |
|  | $ | 47,369 |  |  | $ | 181 |  |  | $ | 177 |  |  | $ | 47,373 |
DECEMBER 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 23,017 |  |  | $ | 26 |  |  | $ | 54 |  |  | $ | 22,989 |
Mortgage-backed securities, residential |  | 32,551 |  |  | 210 |  |  | 325 |  |  | 32,436 |
|  | $ | 55,568 |  |  | $ | 236 |  |  | $ | 379 |  |  | $ | 55,425 |
The following table shows the Corporation’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2017, and December 31, 2016:
|  | Less than 12 Months |  | 12 Months or More |  | Total
In thousands |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
SECURITIES AVAILABLE FOR SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
SEPTEMBER 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 65,649 |  |  | $ | 629 |  |  | $ | 15,756 |  |  | $ | 393 |  |  | $ | 81,405 |  |  | $ | 1,022 |
Mortgage-backed securities, residential |  | 6,783 |  |  | 27 |  |  | — |  |  | — |  |  | 6,783 |  |  | 27 |
State and municipal |  | 1,441 |  |  | 7 |  |  | 691 |  |  | 4 |  |  | 2,132 |  |  | 11 |
CRA Mutual Fund |  | 1,042 |  |  | 2 |  |  | — |  |  | — |  |  | 1,042 |  |  | 2 |
|  | $ | 74,915 |  |  | $ | 665 |  |  | $ | 16,447 |  |  | $ | 397 |  |  | $ | 91,362 |  |  | $ | 1,062 |
DECEMBER 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 71,454 |  |  | $ | 1,529 |  |  | $ | — |  |  | $ | — |  |  | $ | 71,454 |  |  | $ | 1,529 |
Mortgage-backed securities, residential |  | 8,966 |  |  | 81 |  |  | — |  |  | — |  |  | 8,966 |  |  | 81 |
State and municipal |  | 4,933 |  |  | 94 |  |  | — |  |  | — |  |  | 4,933 |  |  | 94 |
CRA Mutual Fund |  | 1,035 |  |  | 9 |  |  | — |  |  | — |  |  | 1,035 |  |  | 9 |
|  | $ | 86,388 |  |  | $ | 1,713 |  |  | $ | — |  |  | $ | — |  |  | $ | 86,388 |  |  | $ | 1,713 |
SECURITIES HELD TO MATURITY |  |  |  |  |  |  |  |  |  |  |  |
SEPTEMBER 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 12,948 |  |  | $ | 52 |  |  | $ | 1,998 |  |  | $ | 2 |  |  | $ | 14,946 |  |  | $ | 54 |
Mortgage-backed securities, residential |  | 10,496 |  |  | 114 |  |  | 1,168 |  |  | 9 |  |  | 11,664 |  |  | 123 |
|  | $ | 23,444 |  |  | $ | 166 |  |  | $ | 3,166 |  |  | $ | 11 |  |  | $ | 26,610 |  |  | $ | 177 |
DECEMBER 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agencies |  | $ | 12,946 |  |  | $ | 54 |  |  | $ | — |  |  | $ | — |  |  | $ | 12,946 |  |  | $ | 54 |
Mortgage-backed securities, residential |  | 12,956 |  |  | 325 |  |  | — |  |  | — |  |  | 12,956 |  |  | 325 |
|  | $ | 25,902 |  |  | $ | 379 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,902 |  |  | $ | 379 |
All mortgage-backed security investments are government sponsored enterprise (GSE) pass-through instruments issued by the Federal National Mortgage Association (FNMA), Government National Mortgage Association (GNMA) or Federal Home Loan Mortgage Corporation (FHLMC), which guarantee the timely payment of principal on these investments. At September 30, 2017, fifty-six available for sale U.S. Government and agency securities had unrealized losses that individually did not exceed 4% of amortized cost. Nine of these securities have been in a continuous loss position for 12 months or more. These unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. At September 30, 2017, eight available for sale residential mortgage-backed securities had unrealized losses that individually did not exceed 1% of amortized cost. These securities have not been in a continuous loss position for 12 months or more. These unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. At September 30, 2017, nine available for sale state and municipal securities had unrealized losses that individually did not exceed 2% of amortized cost. Three of these securities have been in a continuous loss position for 12 months or more. These unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. At September 30, 2017, the CRA Mutual Fund had an unrealized loss that did not exceed 1% of amortized cost. This security has not been in a continuous loss position for 12 months or more. This unrealized loss relates principally to changes in interest rates subsequent to the acquisition of the specific security. At September 30, 2017, eight held to maturity U.S. Government and agency securities had unrealized losses that individually did not exceed 1% of amortized cost. One of these securities has been in a continuous loss position for 12 months or more. These unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. At September 30, 2017, thirteen held to maturity residential mortgage-backed securities had unrealized losses that individually did not exceed 2% of amortized cost. One of these securities has been in a continuous loss position for 12 months or more. These unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. In analyzing the issuer’s financial condition, management considers industry analysts’ reports, financial performance, and projected target prices of investment analysts within a one-year time frame. Based on the above information, management has determined that none of these investments are other-than-temporarily impaired. The fair values of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2) which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the security’s relationship to other benchmark quoted prices. The Corporation uses independent service providers to provide matrix pricing. Management routinely sells securities from its available for sale portfolio in an effort to manage and allocate the portfolio. At September 30, 2017, management had not identified any securities with an unrealized loss that it intends to sell or will be required to sell. In estimating other-than-temporary impairment losses on debt securities, management considers (1) whether management intends to sell the security, or (2) if it is more likely than not that management will be required to sell the security before recovery, or (3) if management does not expect to recover the entire amortized cost basis. In assessing potential other-than-temporary impairment for equity securities, consideration is given to management’s intention and ability to hold the securities until recovery of unrealized losses. Amortized cost and fair value at September 30, 2017, by contractual maturity, where applicable, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay with or without penalties.
|  | Available for Sale |  | Held to Maturity
In thousands |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
1 year or less |  | $ | 6,576 |  |  | $ | 6,589 |  |  | $ | 8,004 |  |  | $ | 7,998 |
Over 1 year through 5 years |  | 97,681 |  |  | 96,972 |  |  | 12,000 |  |  | 11,977 |
Over 5 years through 10 years |  | 15,709 |  |  | 15,681 |  |  | — |  |  | — |
Over 10 years |  | — |  |  | — |  |  | — |  |  | — |
Mortgage-backed securities, residential |  | 36,673 |  |  | 37,351 |  |  | 27,365 |  |  | 27,398 |
CRA mutual fund |  | 1,044 |  |  | 1,042 |  |  | — |  |  | — |
Stock in other banks |  | 647 |  |  | 757 |  |  | — |  |  | — |
|  | $ | 158,330 |  |  | $ | 158,392 |  |  | $ | 47,369 |  |  | $ | 47,373 |
The Corporation did not sell any securities available for sale during the three and nine months ended September 30, 2017 and 2016. At September 30, 2017, and December 31, 2016, securities with a carrying value of $177,259,000 and $134,763,000, respectively, were pledged as collateral as required by law on public and trust deposits, repurchase agreements, and for other purposes.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=4738149 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 954 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2289146 + Details
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