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Investment Securities
 6 Months Ended
Jun. 30, 2017
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, 2017 and December 31, 2016 were as follows:

 

  Total          
  Amortized  Gross Unrealized  Fair 
(in thousands) Cost  Gains  Losses  Value 
June 30, 2017                
U.S. government and federal agency obligations $12,945  $0  $(233) $12,712 
Government sponsored enterprises  37,568   0   (256)  37,312 
Obligations of states and political subdivisions  48,031   261   (298)  47,994 
Mortgage-backed securities:                
Residential - government agencies  118,491   157   (1,315)  117,333 
Commercial - government agencies  990   12   0   1,002 
Total mortgage-backed securities  119,481   169   (1,315)  118,335 
Total available-for-sale securities $218,025  $430  $(2,102) $216,353 
                 
December 31, 2016                
U.S. government and federal agency obligations $13,667  $0  $(303) $13,364 
Government sponsored enterprises  32,786   2   (329)  32,459 
Obligations of states and political subdivisions  42,666   123   (757)  42,032 
Mortgage-backed securities:                
Residential - government agencies  127,527   124   (1,995)  125,656 
Commercial - government agencies  989   12   0   1,001 
Total mortgage-backed securities  128,516   136   (1,995)  126,657 
Total available-for-sale securities $217,635  $261  $(3,384) $214,512 

 

All of the Company’s investment securities are classified as available for sale. Agency bonds and notes, small business administration guaranteed loan certificates (SBA), residential and commercial 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, subordinated debt equity securities, and the Company’s interest in statutory trusts. These securities are reported at cost in other assets in the amount of $10.8 million and $9.8 million as of June 30, 2017 and December 31, 2016, respectively.

 

Debt securities with carrying values aggregating approximately $155.1 million and $167.6 million at June 30, 2017 and December 31, 2016, 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, 2017, 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 $5,781  $5,832 
Due after one year through five years  60,749   60,531 
Due after five years through ten years  26,266   25,956 
Due after ten years  5,748   5,699 
Total  98,544   98,018 
Mortgage-backed securities  119,481   118,335 
Total available-for-sale securities $218,025  $216,353 

 

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, 2017 and December 31, 2016 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, 2017                        
U.S. government and federal agency obligations $7,788  $(133) $4,925  $(100) $12,713  $(233)
Government sponsored enterprises  32,339   (229)  2,473   (27)  34,812   (256)
Obligations of states and political subdivisions  22,886   (264)  1,912   (34)  24,798   (298)
Mortgage-backed securities:                        
Residential - government agencies  77,979   (924)  20,188   (391)  98,167   (1,315)
Total $140,992  $(1,550) $29,498  $(552) $170,490  $(2,102)
                         
(in thousands)                        
At December 31, 2016                        
U.S. government and federal agency obligations $13,365  $(303) $0  $0  $13,365  $(303)
Government sponsored enterprises  29,432   (329)  0   0   29,432   (329)
Obligations of states and political subdivisions  32,318   (757)  0   0   32,318   (757)
Mortgage-backed securities:                        
Residential - government agencies  109,772   (1,848)  3,742   (147)  113,514   (1,995)
Total $184,887  $(3,237) $3,742  $(147) $188,629  $(3,384)

 

The total available for sale portfolio consisted of approximately 324 securities at June 30, 2017. The portfolio included 202 securities having an aggregate fair value of $170.5 million that were in a loss position at June 30, 2017. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $29.5 million at fair value. The $2.1 million aggregate unrealized loss included in accumulated other comprehensive income at June 30, 2017 was caused by interest rate fluctuations.

 

The total available for sale portfolio consisted of approximately 298 securities at December 31, 2016. The portfolio included 216 securities having an aggregate fair value of $188.6 million that were in a loss position at December 31, 2016. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer had a fair value of $3.7 million at December 31, 2016. The $3.4 million aggregate unrealized loss included in accumulated other comprehensive income at December 31, 2016 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, 2017 and December 31, 2016, respectively. In the absence of changes in credit quality of these investments, the fair value is expected to recover on all debt securities as they approach their maturity date or re-pricing date, or if market yields for such investments decline. 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 the Company will be required to sell such investment securities.

 

The table 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) 2017  2016  2017  2016 
Gains realized on sales $0  $18  $0  $490 
Losses realized on sales  0   0   0   0 
Other-than-temporary impairment recognized  0   0   0   0 
Investment securities gains $0  $18  $0  $490