| SECURITIES |
NOTE 2 – SECURITIES
The amortized cost and fair value of securities were as follows (dollars in thousands):
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December 31, 2016 |
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Available for Sale: |
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U.S. Treasury and federal agency securities |
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$ |
85,582 |
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|
$ |
49 |
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|
$ |
(1,281 |
) |
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$ |
84,350 |
|
U.S. Agency MBS and CMOs |
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|
12,037 |
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11 |
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(231 |
) |
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|
11,817 |
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Tax-exempt state and municipal bonds |
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|
39,578 |
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212 |
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(603 |
) |
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|
39,187 |
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Taxable state and municipal bonds |
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34,255 |
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65 |
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(437 |
) |
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33,883 |
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Corporate bonds and other debt securities |
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13,765 |
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16 |
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(55 |
) |
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13,726 |
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Other equity securities |
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1,500 |
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|
--- |
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(30 |
) |
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1,470 |
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$ |
186,717 |
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$ |
353 |
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$ |
(2,637 |
) |
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$ |
184,433 |
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Held to Maturity |
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Tax-exempt state and municipal bonds |
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$ |
69,378 |
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|
$ |
573 |
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|
$ |
(102 |
) |
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$ |
69,849 |
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December 31, 2015 |
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Available for Sale: |
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U.S. Treasury and federal agency securities |
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$ |
74,618 |
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|
$ |
48 |
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|
$ |
(274 |
) |
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$ |
74,392 |
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U. S. Agency MBS and CMOs |
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13,828 |
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35 |
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(108 |
) |
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|
13,755 |
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Tax-exempt state and municipal bonds |
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32,943 |
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|
692 |
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(37 |
) |
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33,598 |
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Taxable state and municipal bonds |
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28,554 |
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|
246 |
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(37 |
) |
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28,763 |
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Corporate bonds and other debt securities |
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14,838 |
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19 |
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(44 |
) |
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14,813 |
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Other equity securities |
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1,500 |
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--- |
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(6 |
) |
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1,494 |
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$ |
166,281 |
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$ |
1,040 |
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$ |
(506 |
) |
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$ |
166,815 |
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Held to Maturity: |
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Tax-exempt state and municipal bonds |
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$ |
51,856 |
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$ |
986 |
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|
$ |
(5 |
) |
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$ |
52,837 |
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Proceeds from the sale of securities available for sale were $11.7 million, $20.6 million and $10.9 million, respectively, for the years ended December 31, 2016, 2015 and 2014, resulting in net gains on sale of $124,000, $129,000 and $75,000, respectively, as reported in the consolidated statements of income. This resulted in reclassifications of $124,000 ($80,000 net of tax), $129,000 ($84,000 net of tax) and $75,000 ($49,000 net of tax), respectively, from accumulated other comprehensive income to gain on sale of securities in the consolidated statements of income in years ended December 31, 2016, 2015 and 2014.
Contractual maturities of debt securities at December 31, 2016 were as follows (dollars in thousands):
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Held–to-Maturity Securities |
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Available-for-Sale Securities |
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Amortized
Cost
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Fair
Value
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Amortized
Cost
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Fair
Value
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Due in one year or less |
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$ |
25,203 |
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$ |
25,156 |
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$ |
17,192 |
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$ |
17,228 |
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Due from one to five years |
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14,801 |
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15,069 |
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94,916 |
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94,067 |
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Due from five to ten years |
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8,279 |
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8,443 |
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57,224 |
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56,200 |
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Due after ten years |
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21,095 |
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21,181 |
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15,885 |
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15,468 |
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$ |
69,378 |
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$ |
69,849 |
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$ |
185,217 |
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$ |
182,963 |
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Securities with unrealized losses at December 31, 2016 and 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (dollars in thousands):
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Less than 12 Months |
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12 Months or More |
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Total |
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December 31, 2016
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Fair
Value
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Unrealized
Loss
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Fair
Value
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Unrealized
Loss
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Fair
Value
|
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Unrealized
Loss
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U.S. Treasury and federal agency securities |
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$ |
59,129 |
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|
$ |
(1,271 |
) |
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$ |
3,053 |
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|
$ |
(10 |
) |
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$ |
62,182 |
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|
$ |
(1,281 |
) |
U.S. Agency MBS and CMOs |
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|
10,702 |
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(231 |
) |
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|
--- |
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|
--- |
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10,702 |
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(231 |
) |
Tax-exempt state and municipal bonds |
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49,508 |
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(698 |
) |
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1,672 |
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(7 |
) |
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51,180 |
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(705 |
) |
Taxable state and municipal bonds |
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22,633 |
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(437 |
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--- |
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--- |
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22,633 |
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(437 |
) |
Corporate bonds and other debt securities |
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5,745 |
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(50 |
) |
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|
500 |
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(5 |
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6,245 |
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(55 |
) |
Other equity securities |
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1,470 |
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(30 |
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--- |
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--- |
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1,470 |
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(30 |
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Total temporarily impaired |
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$ |
149,187 |
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$ |
(2,717 |
) |
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$ |
5,225 |
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$ |
(22 |
) |
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$ |
154,412 |
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$ |
(2,739 |
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Less than 12 Months |
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12 Months or More |
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Total |
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December 31, 2015
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Fair
Value
|
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Unrealized
Loss
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Fair
Value
|
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Unrealized
Loss
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Fair
Value
|
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Unrealized
Loss
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U.S. Treasury and federal agency securities |
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$ |
35,090 |
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|
$ |
(187 |
) |
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$ |
7,036 |
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$ |
(82 |
) |
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$ |
42,126 |
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$ |
(269 |
) |
U.S. Agency MBS and CMOs |
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8,842 |
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(108 |
) |
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|
--- |
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--- |
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8,842 |
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(108 |
) |
Tax-exempt state and municipal bonds |
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3,487 |
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(9 |
) |
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2,022 |
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(33 |
) |
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5,509 |
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(42 |
) |
Taxable state and municipal bonds |
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8,158 |
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(29 |
) |
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|
640 |
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(8 |
) |
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8,798 |
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(37 |
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Corporate bonds and other debt securities |
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9,330 |
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(47 |
) |
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|
499 |
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(2 |
) |
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9,829 |
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(49 |
) |
Other equity securities |
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1,494 |
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(6 |
) |
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--- |
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--- |
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1,494 |
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(6 |
) |
Total temporarily impaired |
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$ |
66,401 |
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$ |
(386 |
) |
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$ |
10,197 |
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$ |
(125 |
) |
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$ |
76,598 |
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$ |
(511 |
) |
Other-Than-Temporary-Impairment
Management evaluates securities for other-than-temporary impairment ("OTTI") at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Management determined that the unrealized losses for each period were attributable to changes in interest rates and not due to credit quality. As such, no OTTI charges were necessary during 2016, 2015 and 2014.
Securities with a carrying value of approximately $2.0 million were pledged as security for public deposits, letters of credit and for other purposes required or permitted by law at December 31, 2016 and 2015.
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