Quarterly report pursuant to Section 13 or 15(d)

Securities

v3.7.0.1
Securities
3 Months Ended
Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities

The following is a summary of securities available for sale as of March 31, 2017 and December 31, 2016: 
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Estimated Fair Value
 
(in thousands)
March 31, 2017
 
 
 
 
 
 
 
Mortgage-backed securities (1) (2)
$
262,713

 
$
862

 
$
1,480

 
$
262,095

Collateralized mortgage obligations (1)
87,855

 
13

 
940

 
86,928

U.S. government agency securities
7,499

 

 
53

 
7,446

SBA loan pool securities
4,354

 

 
191

 
4,163

Municipal bonds-tax exempt
159,203

 
431

 
860

 
158,774

Municipal bonds-taxable
1,045

 

 
8

 
1,037

Corporate bonds
5,008

 
14

 


 
5,022

U.S. treasury securities
155

 

 

 
155

Mutual funds
22,916

 

 
526

 
22,390

Total securities available for sale
$
550,748

 
$
1,320

 
$
4,058

 
$
548,010

 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
Mortgage-backed securities (1) (2)
$
230,489

 
$
598

 
$
1,457

 
$
229,630

Collateralized mortgage obligations (1)
77,447

 
6

 
1,002

 
76,451

U.S. government agency securities
7,499

 

 
58

 
7,441

SBA loan pool securities
4,356

 

 
210

 
4,146

Municipal bonds-tax exempt
159,789

 
236

 
1,995

 
158,030

Municipal bonds-taxable
13,391

 
319

 
9

 
13,701

Corporate bonds
5,010

 
5

 

 
5,015

U.S. treasury securities
156

 

 

 
156

Mutual funds
22,916

 

 
522

 
22,394

Total securities available for sale
$
521,053

 
$
1,164

 
$
5,253

 
$
516,964

                              
(1) 
Collateralized by residential mortgages and guaranteed by U.S. government sponsored entities.
(2) 
Includes securities collateralized by home equity conversion mortgages with total estimated fair value of $50.5 million and $52.9 million as of March 31, 2017 and December 31, 2016, respectively.





The amortized cost and estimated fair value of securities as of March 31, 2017, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. Mutual funds do not have contractual maturities. However, they are included in the table shown below as over ten years since the Company intends to hold these securities for at least this duration. All other securities are included based on their contractual maturities.
 
Available for Sale
 
Amortized Cost
 
Estimated Fair Value
 
(in thousands)
Within one year
$
5,485

 
$
5,443

Over one year through five years
64,510

 
64,393

Over five years through ten years
250,661

 
249,514

Over ten years
230,092

 
228,660

Total
$
550,748

 
$
548,010


Gross unrealized losses on securities available for sale, the estimated fair value of the related securities and the number of securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows as of March 31, 2017 and December 31, 2016:
 
Holding Period
 
Less Than 12 Months
 
12 Months or More
 
Total
 
Gross Unrealized Loss
 
Estimated Fair Value
 
Number of Securities
 
Gross Unrealized Loss
 
Estimated Fair Value
 
Number of Securities
 
Gross Unrealized Loss
 
Estimated Fair Value
 
Number of Securities
 
(in thousands, except number of securities)
March 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
1,418

 
$
149,993

 
51

 
$
62

 
$
7,096

 
2

 
$
1,480

 
$
157,089

 
53

Collateralized mortgage obligations
557

 
61,622

 
27

 
383

 
15,888

 
9

 
940


77,510


36

U.S. government agency securities
53

 
7,446

 
3

 

 

 

 
53


7,446


3

SBA loan pool securities

 

 

 
191

 
4,163

 
2

 
191


4,163


2

Municipal bonds-tax exempt
860

 
104,412

 
45

 

 

 

 
860


104,412


45

Municipal bonds-taxable
8

 
1,036

 
1

 

 

 

 
8


1,036


1

Mutual funds
413

 
21,478

 
4

 
113

 
914

 
3

 
526


22,392


7

Total
$
3,309

 
$
345,987

 
131

 
$
749

 
$
28,061

 
16

 
$
4,058

 
$
374,048

 
147

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
1,345

 
$
102,647

 
38

 
$
112

 
$
11,350

 
3

 
$
1,457

 
$
113,997

 
41

Collateralized mortgage obligations
676

 
60,786

 
27

 
326

 
10,579

 
7

 
1,002

 
71,365

 
34

U.S. government agency securities
58

 
7,441

 
3

 

 

 

 
58

 
7,441

 
3

SBA loan pool securities

 

 

 
210

 
4,146

 
2

 
210

 
4,146

 
2

Municipal bonds-tax exempt
1,995

 
125,004

 
54

 

 

 

 
1,995

 
125,004

 
54

Municipal bonds-taxable
9

 
2,904

 
2

 

 

 

 
9

 
2,904

 
2

Mutual funds
413

 
21,478

 
4

 
109

 
916

 
3

 
522

 
22,394

 
7

Total
$
4,496

 
$
320,260

 
128

 
$
757

 
$
26,991

 
15

 
$
5,253

 
$
347,251

 
143



All individual securities that have been in a continuous unrealized loss position for 12 months or longer as of March 31, 2017 and December 31, 2016 had investment grade ratings upon purchase. The issuers of these securities have not established any cause for default on these securities and the various rating agencies have reaffirmed these securities’ long-term investment grade status as of March 31, 2017 and December 31, 2016. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated.

The Company does not intend to sell these securities and it is more likely than not that we will not be required to sell the securities before the recovery of their amortized cost basis. Interest payments have been made as scheduled, and management believes this will continue in the future and that the bonds will be repaid in full as scheduled. Therefore, in management’s opinion, all securities that have been in a continuous unrealized loss position for the past 12 months or longer as of March 31, 2017 and December 31, 2016 were not other-than-temporarily impaired, and therefore, no impairment charges as of March 31, 2017 and December 31, 2016 were warranted.

Realized gains and losses on sales of securities and proceeds from sales of securities were as follows for the periods indicated:
 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(in thousands)
Gross realized gains on sales of securities
$
269

 
$

Gross realized losses on sales of securities

 

Net realized gains on sales of securities
$
269

 
$

Proceeds from sales of securities
$
12,573

 
$


For the three months ended March 31, 2017, there was a $269,000 net gain in earnings resulting from the sale of securities. Net unrealized gains of $319,000 related to these sold securities had previously been recorded in accumulated other comprehensive income as of the beginning of the period. There were no sales of securities during the three months ended March 31, 2016.

Securities available for sale with market values of $133.0 million and $133.0 million as of March 31, 2017 and December 31, 2016, respectively, were pledged to secure public deposits and for other purposes as required or permitted by law.