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Investment Securities
 3 Months Ended
Mar. 31, 2018
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 March 31, 2018 and December 31, 2017 were as follows:

 

    Total                    
    Amortized     Gross Unrealized     Fair  
(in thousands)   Cost     Gains     Losses     Value  
March 31, 2018                        
U.S. Treasury   $ 1,981     $ 0     $ (42 )   $ 1,939  
U.S. government and federal agency obligations     11,798               (305 )     11,493  
Government sponsored enterprises     38,819       0       (642 )     38,177  
Obligations of states and political subdivisions     42,271       42       (709 )     41,604  
Mortgage-backed securities:                                
Residential - government agencies     126,186       11       (3,690 )     122,507  
Total available-for-sale securities   $ 221,055     $ 53     $ (5,388 )   $ 215,720  
                                 
December 31, 2017                                
U.S. Treasury   $ 1,980     $ 0     $ (13 )   $ 1,967  
U.S. government and federal agency obligations     12,341               (268 )     12,073  
Government sponsored enterprises     37,321       0       (424 )     36,897  
Obligations of states and political subdivisions     47,019       114       (477 )     46,656  
Mortgage-backed securities:                                
Residential - government agencies     131,045       44       (2,140 )     128,949  
Total available-for-sale securities   $ 229,706     $ 158     $ (3,322 )   $ 226,542  

 

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 the amount of $9.7 million and $11.0 million as of March 31, 2018 and December 31, 2017, respectively.

 

Debt securities with carrying values aggregating approximately $194.3 million and $181.7 million at March 31, 2018 and December 31, 2017, 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 March 31, 2018, 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   $ 9,928     $ 9,883  
Due after one year through five years     60,479       59,974  
Due after five years through ten years     21,390       20,344  
Due after ten years     3,072       3,012  
Total     94,869       93,213  
Mortgage-backed securities     126,186       122,507  
Total available-for-sale securities   $ 221,055     $ 215,720  

 

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 March 31, 2018 and December 31, 2017 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 March 31, 2018                                    
U.S. Treasury   $ 1,939     $ (42 )   $ 0     $ 0     $ 1,939     $ (42 )
U.S. government and federal agency obligations     0       0       11,493       (305 )     11,493       (305 )
Government sponsored enterprises     14,881       (218 )     23,295       (424 )     38,176       (642 )
Obligations of states and political subdivisions     22,906       (260 )     12,379       (449 )     35,285       (709 )
Mortgage-backed securities:                                                
Residential - government agencies     53,183       (1,114 )     66,854       (2,576 )     120,037       (3,690 )
  Total   $ 92,909     $ (1,634 )   $ 114,021     $ (3,754 )   $ 206,930     $ (5,388 )
                                                 
(in thousands)                                                
At December 31, 2017                                                
U.S. Treasury   $ 1,967     $ (13 )   $ 0     $ 0     $ 1,967     $ (13 )
U.S. government and federal agency obligations     0       0       12,073       (268 )     12,073       (268 )
Government sponsored enterprises     16,471       (119 )     20,426       (305 )     36,897       (424 )
Obligations of states and political subdivisions     22,013       (165 )     12,570       (312 )     34,583       (477 )
Mortgage-backed securities:                                                
Residential - government agencies     52,829       (488 )     69,580       (1,652 )     122,409       (2,140 )
  Total   $ 93,280     $ (785 )   $ 114,649     $ (2,537 )   $ 207,929     $ (3,322 )

 

The total available for sale portfolio consisted of approximately 341 securities at March 31, 2018. The portfolio included 298 securities having an aggregate fair value of $206.9 million that were in a loss position at March 31, 2018. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $114.0 million at fair value. The $5.4 million aggregate unrealized loss included in accumulated other comprehensive income at March 31, 2018 was caused by interest rate fluctuations.

 

The total available for sale portfolio consisted of approximately 355 securities at December 31, 2017. The portfolio included 280 securities having an aggregate fair value of $207.9 million that were in a loss position at December 31, 2017. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer had a fair value of $114.6 million at December 31, 2017. The $3.3 million aggregate unrealized loss included in accumulated other comprehensive loss at December 31, 2017 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 March 31, 2018 and December 31, 2017, 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 March 31,  
(in thousands)   2018     2017  
Gains realized on sales   $ 98     $ 0  
Losses realized on sales     0       0  
Other-than-temporary impairment recognized     0       0  
Investment securities gains   $ 98     $ 0