Securities | 3 Months Ended |
Mar. 31, 2015 |
Securities [Abstract] | |
Securities | NOTE 2 – SECURITIES |
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Available for Sale |
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The amortized cost and approximate fair value of securities available for sale as of March 31, 2015 and December 31, 2014 are summarized as follows: |
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| | | | | | Gross | | | Gross | | | | | | | | |
| | | Amortized | | | Unrealized | | | Unrealized | | | Fair | | | | | |
(Dollars in thousands) | | | Cost | | | Gains | | | Losses | | | Value | | | | | |
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31-Mar-15 | | | | | | | | | | | | | | | | | |
U.S. government agencies | | $ | 11,428 | | $ | 25 | | $ | -47 | | $ | 11,406 | | | | | |
State and political subdivisions | | | 32,145 | | | 276 | | | -220 | | | 32,201 | | | | | |
Mortgage-backed securities - | | | | | | | | | | | | | | | | | |
U.S. government-sponsored enterprises | | | 40,563 | | | 435 | | | -43 | | | 40,955 | | | | | |
Equity securities-financial services industry and other | | | 8 | | | 3 | | | - | | | 11 | | | | | |
| | $ | 84,144 | | $ | 739 | | $ | -310 | | $ | 84,573 | | | | | |
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31-Dec-14 | | | | | | | | | | | | | | | | | |
U.S. government agencies | | $ | 7,873 | | $ | 17 | | $ | -32 | | $ | 7,858 | | | | | |
State and political subdivisions | | | 26,432 | | | 158 | | | -206 | | | 26,384 | | | | | |
Mortgage-backed securities - | | | | | | | | | | | | | | | | | |
U.S. government-sponsored enterprises | | | 43,382 | | | 500 | | | -158 | | | 43,724 | | | | | |
Equity securities-financial services industry and other | | | 8 | | | 2 | | | - | | | 10 | | | | | |
| | $ | 77,695 | | $ | 677 | | $ | -396 | | $ | 77,976 | | | | | |
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Securities with a carrying value of approximately $32.1 million and $32.8 million at March 31, 2015 and December 31, 2014, respectively, were pledged to secure public deposits and for other purposes required or permitted by applicable laws and regulations. |
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The amortized cost and fair value of securities available for sale at March 31, 2015 are shown below by contractual maturity. Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties. |
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| | Amortized | | Fair | | | | | | | | | | | |
(Dollars in thousands) | | Cost | | Value | | | | | | | | | | | |
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Due in one year or less | | $ | - | | $ | - | | | | | | | | | | | |
Due after one year through five years | | | - | | | - | | | | | | | | | | | |
Due after five years through ten years | | | 2,301 | | | 2,333 | | | | | | | | | | | |
Due after ten years | | | 29,844 | | | 29,868 | | | | | | | | | | | |
Total bonds and obligations | | | 32,145 | | | 32,201 | | | | | | | | | | | |
U.S. government agencies | | | 11,428 | | | 11,406 | | | | | | | | | | | |
Mortgage-backed securities: | | | | | | | | | | | | | | | | | |
U.S. government-sponsored enterprises | | | 40,563 | | | 40,955 | | | | | | | | | | | |
Equity securities-financial services industry and other | | | 8 | | | 11 | | | | | | | | | | | |
Total available for sale securities | | $ | 84,144 | | $ | 84,573 | | | | | | | | | | | |
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Gross realized gains on sales of securities available for sale were $216 thousand and gross realized losses were $48 thousand for the three months ended March 31, 2015. There were no sales of securities available for sale for the three months ended March 31, 2014. |
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Temporarily Impaired Securities |
The following table shows gross unrealized losses and fair value of securities with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by category and length of time that individual available for sale securities have been in a continuous unrealized loss position at March 31, 2015 and December 31, 2014. |
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| Less Than 12 Months | | 12 Months or More | | Total |
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| Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized |
(Dollars in thousands) | Value | | Losses | | Value | | Losses | | Value | | Losses |
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31-Mar-15 | | | | | | | | | | | | | | | | | |
U.S. government agencies | $ | 5,677 | | $ | -16 | | $ | 2,784 | | $ | -31 | | $ | 8,461 | | $ | -47 |
State and political subdivisions | | 15,522 | | | -179 | | | 1,859 | | | -41 | | | 17,381 | | | -220 |
Mortgage-backed securities - | | | | | | | | | | | | | | | | | |
U.S. government-sponsored enterprises | | 9,624 | | | -30 | | | 2,024 | | | -13 | | | 11,648 | | | -43 |
Total temporarily impaired securities | $ | 30,823 | | $ | -225 | | $ | 6,667 | | $ | -85 | | $ | 37,490 | | $ | -310 |
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31-Dec-14 | | | | | | | | | | | | | | | | | |
U.S. government agencies | $ | - | | $ | - | | $ | 2,905 | | $ | -32 | | $ | 2,905 | | $ | -32 |
State and political subdivisions | | 7,603 | | | -112 | | | 5,713 | | | -94 | | | 13,316 | | | -206 |
Mortgage-backed securities - | | | | | | | | | | | | | | | | | |
U.S. government-sponsored enterprises | | 15,679 | | | -94 | | | 3,432 | | | -64 | | | 19,111 | | | -158 |
Total temporarily impaired securities | $ | 23,282 | | $ | -206 | | $ | 12,050 | | $ | -190 | | $ | 35,332 | | $ | -396 |
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For each security whose fair value is less than their amortized cost basis, a review is conducted to determine if an other-than-temporary impairment has occurred. As of March 31, 2015, we reviewed our available for sale securities portfolio for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and likelihood of selling the security. The intent and likelihood of sale of debt and equity securities are evaluated based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position. |
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U.S. Government Agencies |
At March 31, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our U.S. government agencies securities were primarily due to changes in spreads and market conditions and not credit quality. At March 31, 2015, there were five securities with a fair value of $8.5 million that had an unrealized loss that amounted to $47 thousand. As of March 31, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis. Therefore, none of the U.S. government agency securities at March 31, 2015, were deemed to be other-than-temporarily impaired (“OTTI”). |
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At December 31, 2014, there were two securities with a fair value of $2.9 million that had an unrealized loss that amounted to $32 thousand. |
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State and Political Subdivisions |
At March 31, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our state and political subdivisions securities were caused by changes in interest rates and spreads and were not the result of credit quality. At March 31, 2015, there were 28 securities with a fair value of $17.4 million that had an unrealized loss that amounted to $220 thousand. These securities typically have maturity dates greater than 10 years and the fair values are more sensitive to changes in market interest rates. As of March 31, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis. Therefore, none of our state and political subdivision securities at March 31, 2015, were deemed to be OTTI. |
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At December 31, 2014, there were 22 securities with a fair value of $13.3 million that had an unrealized loss that amounted to $206 thousand. |
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Mortgage-Backed Securities |
At March 31, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our mortgage-backed securities guaranteed by U.S. government-sponsored enterprises were primarily due to changes in spreads and market conditions and not credit quality. At March 31, 2015, there were seven securities with a fair value of $11.6 million that had an unrealized loss that amounted to $43 thousand. As of March 31, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis. Therefore, none of our mortgage-backed securities at March 31, 2015, were deemed to be OTTI. |
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At December 31, 2014, there were 13 securities with a fair value of $19.1 million that had an unrealized loss that amounted to $158 thousand. |
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Equity Securities |
Our marketable equity securities portfolio consists primarily of common stock of entities in the financial services industry. At March 31, 2015, we did not have any securities in an unrealized loss position. |
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At December 31, 2014, we did not have any securities in an unrealized loss position. |
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We continue to closely monitor the performance of the securities we own as well as the impact from any further deterioration in the economy or in the banking industry that may adversely affect these securities. We will continue to evaluate them for other-than-temporary impairment, which could result in a future non-cash charge to earnings. |
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Held to Maturity Securities |
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The amortized cost and approximate fair value of securities held to maturity as of March 31, 2015 and December 31, 2014, are summarized as follows: |
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| | | | | Gross | | | Gross | | | | | | | | | |
| | Amortized | | | Unrealized | | | Unrealized | | | Fair | | | | | | |
(Dollars in thousands) | | Cost | | | Gains | | | Losses | | | Value | | | | | | |
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31-Mar-15 | | | | | | | | | | | | | | | | | |
State and political subdivisions | $ | 6,491 | | $ | 214 | | $ | -1 | | $ | 6,704 | | | | | | |
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31-Dec-14 | | | | | | | | | | | | | | | | | |
State and political subdivisions | $ | 6,006 | | $ | 189 | | $ | -5 | | $ | 6,190 | | | | | | |
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The amortized cost and carrying value of securities held to maturity at March 31, 2015 are shown below by contractual maturity. Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties. |
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| | Amortized | | | Fair | | | | | | | | | | | | |
(Dollars in thousands) | | Cost | | | Value | | | | | | | | | | | | |
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Due in one year or less | $ | 2,590 | | $ | 2,590 | | | | | | | | | | | | |
Due after one year through five years | | - | | | - | | | | | | | | | | | | |
Due after five years through ten years | | 2,846 | | | 2,937 | | | | | | | | | | | | |
Due after ten years | | 1,055 | | | 1,177 | | | | | | | | | | | | |
Total held to maturity securities | $ | 6,491 | | $ | 6,704 | | | | | | | | | | | | |
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Temporarily Impaired Securities |
The following table shows gross unrealized losses and fair value of held to maturity securities with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by category and length of time that individual held to maturity securities have been in a continuous unrealized loss position at March 31, 2015 and December 31, 2014: |
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| Less Than 12 Months | | 12 Months or More | | Total |
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| Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized |
(Dollars in thousands) | Value | | Losses | | Value | | Losses | | Value | | Losses |
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31-Mar-15 | | | | | | | | | | | | | | | | | |
State and political subdivisions | $ | 261 | | $ | -1 | | $ | - | | $ | - | | $ | 261 | | $ | -1 |
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31-Dec-14 | | | | | | | | | | | | | | | | | |
State and political subdivisions | $ | - | | $ | - | | $ | 811 | | $ | -5 | | $ | 811 | | $ | -5 |
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For each security whose fair value is less than their amortized cost basis, a review is conducted to determine if an other-than-temporary impairment has occurred. As of March 31, 2015, we reviewed our held to maturity securities portfolio for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and likelihood of selling the security. The intent and likelihood of sale of debt and equity securities are evaluated based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position. |
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At March 31, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our state and political subdivisions securities were caused by changes in interest rates and spreads and were not the result of credit quality. At March 31, 2015, there was one security with a fair value of $261 thousand that had an unrealized loss that amounted to $1 thousand. These securities typically have maturity dates greater than 10 years and the fair values are more sensitive to changes in market interest rates. As of March 31, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis. Therefore, none of our state and political subdivision securities at March 31, 2015 were deemed to be OTTI. |
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At December 31, 2014, there were two securities with a fair value of $811 thousand that had an unrealized loss that amounted to $5 thousand. |
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