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Investment Securities
 6 Months Ended
Jun. 30, 2014
Investments Debt And Equity Securities Abstract  
Investment Securities
(4) Investment Securities

 

The amortized cost and fair value of debt securities classified as available-for-sale at June 30, 2014 and December 31, 2013 were as follows:

 

          Gross     Gross        
    Amortized     Unrealized     Unrealized        
(in thousands)   Cost     Gains     Losses     Fair value  
June 30, 2014                                
Government sponsored enterprises   $ 67,943     $ 352     $ 247     $ 68,048  
Asset-backed securities     115,389       1,026       1,677       114,738  
Obligations of states and political subdivisions     32,259       679       71       32,867  
                                 
Total available-for-sale securities   $ 215,591     $ 2,057     $ 1,995     $ 215,653  
                                 
December 31, 2013                                
U.S. Treasury   $ 1,000     $ 3     $ 0     $ 1,003  
Government sponsored enterprises     61,006       377       767       60,616  
Asset-backed securities     112,747       817       3,191       110,373  
Obligations of states and political subdivisions     33,637       568       212       33,993  
                                 
Total available-for-sale securities   $ 208,390     $ 1,765     $ 4,170     $ 205,985  

 

All of the Company’s investment securities are classified as available for sale. Agency bonds and notes, agency mortgage-backed securities and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, and the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB), which are U.S. government-sponsored enterprises.

 

Other investments and securities primarily consist of Federal Home Loan Bank stock and the Company’s interest in statutory trusts. These securities are reported at cost in the amount of $4.0 million as of both June 30, 2014 and December 31, 2013, respectively.

 

Debt securities with carrying values aggregating approximately $186.9 million and $145.8 million at June 30, 2014 and December 31, 2013, respectively, were pledged to secure public funds, securities sold under agreements to repurchase, and for other purposes as required or permitted by law.

 

The amortized cost and fair value of debt securities classified as available-for-sale at June 30, 2014, by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties.

 

    Amortized     Fair  
(in thousands)   Cost     Value  
Due in one year or less   $ 4,673     $ 4,720  
Due after one year through five years     53,518       54,053  
Due after five years through ten years     40,716       40,878  
Due after ten years     1,295       1,264  
Total     100,202       100,915  
Asset-backed securities     115,389       114,738  
Total available-for-sale securities   $ 215,591     $ 215,653  

 

Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2014 and December 31, 2013 were as follows:

 

    Less than 12 months     12 months or more     Total     Total  
    Fair     Unrealized     Fair     Unrealized     Fair     Unrealized  
(in thousands)   Value     Losses     Value     Losses     Value     Losses  
At June 30, 2014                                                
Government sponsored enterprises   $ 3,473     $ (13 )   $ 24,280     $ (234 )   $ 27,753     $ (247 )
Asset-backed securities     12,035       (74 )     50,745       (1,603 )     62,780       (1,677 )
Obligations of states and political subdivisions     3,093       (13 )     3,203       (58 )     6,296       (71 )
Total   $ 18,601     $ (100 )   $ 78,228     $ (1,895 )   $ 96,829     $ (1,995 )
                                                 
(in thousands)                                                
At December 31, 2013                                                
Government sponsored enterprises   $ 25,771     $ (767 )   $ 0     $ 0     $ 25,771     $ (767 )
Asset-backed securities     76,048       (2,940 )     5,941       (251 )     81,989       (3,191 )
Obligations of states and political subdivisions     6,907       (159 )     450       (53 )     7,357       (212 )
Total   $ 108,726     $ (3,866 )   $ 6,391     $ (304 )   $ 115,117     $ (4,170 )

 

The total available for sale portfolio consisted of approximately 302 securities at June 30, 2014. The portfolio included 86 securities having an aggregate fair value of $96.8 million that were in a loss position at June 30, 2014. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $78.2 million at fair value. The $2.0 million aggregate unrealized loss included in accumulated other comprehensive income at June 30, 2014 was caused by interest rate fluctuations.

 

The total available for sale portfolio consisted of approximately 348 securities at December 31, 2013. The portfolio included 96 securities having an aggregate fair value of $115.1 million that were in a loss position at December 31, 2013. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $6.4 million at fair value. The $4.2 million aggregate unrealized loss included in accumulated other comprehensive income at December 31, 2013 was caused by interest rate fluctuations.

 

Because the decline in fair value is attributable to changes in interest rates and not credit quality these investments were not considered other-than-temporarily impaired at June 30, 2014 and December 31, 2013, respectively. In addition, the Company does not have the intent to sell these investments over the period of recovery, and it is not more likely than not that it will be required to sell such investment securities.

 

The table below presents the components of investment securities gains and losses which have been recognized in earnings.

 

    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2014     2013     2014     2013  
Gains realized on sales   $ 0     $ 260     $ 0     $ 554  
Losses realized on sales     0       0       0       0  
Other-than-temporary impairment recognized     0       0       0       0  
Investment securities gains   $ 0     $ 260     $ 0     $ 554