Annual report pursuant to Section 13 and 15(d)

DEBT SECURITIES

v3.3.1.900
DEBT SECURITIES
 12 Months Ended
Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]  
DEBT SECURITIES
NOTE 3.
DEBT SECURITIES
 
The amortized cost and fair values of available-for-sale and held-to-maturity debt securities at December 31, 2015 and 2014 are summarized as follows:
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Market
 
 
 
Cost
 
Gain
 
Loss
 
Value
 
 
 
(In Thousands)
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and government sponsored agencies
 
$
44,581
 
$
569
 
$
(141)
 
$
45,009
 
Mortgage-backed securities
 
 
135,363
 
 
1,945
 
 
(354)
 
 
136,954
 
State and municipal securities
 
 
143,403
 
 
2,731
 
 
(101)
 
 
146,033
 
Corporate debt
 
 
14,902
 
 
67
 
 
(27)
 
 
14,942
 
Total
 
$
338,249
 
$
5,312
 
$
(623)
 
$
342,938
 
Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
21,666
 
 
368
 
 
(332)
 
 
21,702
 
State and municipal securities
 
 
5,760
 
 
449
 
 
(1)
 
 
6,208
 
Total
 
$
27,426
 
$
817
 
$
(333)
 
$
27,910
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and government sponsored agencies
 
$
50,363
 
$
775
 
$
-
 
$
51,138
 
Mortgage-backed securities
 
 
92,439
 
 
3,095
 
 
(11)
 
 
95,523
 
State and municipal securities
 
 
132,780
 
 
3,211
 
 
(328)
 
 
135,663
 
Corporate debt
 
 
15,821
 
 
165
 
 
-
 
 
15,986
 
Total
 
$
291,403
 
$
7,246
 
$
(339)
 
$
298,310
 
Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
23,804
 
 
449
 
 
(320)
 
 
23,933
 
State and municipal securities
 
 
5,551
 
 
490
 
 
-
 
 
6,041
 
Total
 
$
29,355
 
$
939
 
$
(320)
 
$
29,974
 
 
All mortgage-backed debt securities are with government sponsored enterprises (GSEs) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.
 
At year-end 2015 and 2014, there were no holdings of debt securities of any issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.
 
The amortized cost and fair value of debt securities as of December 31, 2015 and 2014 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
 
December 31, 2015
 
December 31, 2014
 
 
 
Amortized Cost
 
Market Value
 
Amortized Cost
 
Market Value
 
 
 
(In Thousands)
 
Debt securities available for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
Due within one year
 
$
16,770
 
$
16,868
 
$
16,944
 
$
17,246
 
Due from one to five years
 
 
153,880
 
 
156,311
 
 
121,591
 
 
123,962
 
Due from five to ten years
 
 
32,236
 
 
32,805
 
 
60,079
 
 
61,221
 
Due after ten years
 
 
-
 
 
-
 
 
350
 
 
358
 
Mortgage-backed securities
 
 
135,363
 
 
136,954
 
 
92,439
 
 
95,523
 
 
 
$
338,249
 
$
342,938
 
$
291,403
 
$
298,310
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
Due from five to ten years
 
 
627
 
 
659
 
 
298
 
 
325
 
Due after ten years
 
 
5,133
 
 
5,549
 
 
5,253
 
 
5,716
 
Mortgage-backed securities
 
 
21,666
 
 
21,702
 
 
23,804
 
 
23,933
 
 
 
$
27,426
 
$
27,910
 
$
29,355
 
$
29,974
 
 
The following table shows the gross unrealized losses and fair value of debt securities, aggregated by category and length of time that securities have been in a continuous unrealized loss position at December 31, 2015 and 2014. In estimating other-than-temporary impairment losses, management considers, among other things, the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. The unrealized losses shown in the following table are primarily due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2015. There were no other-than-temporary impairments for the years ended December 31, 2015, 2014 and 2013.
 
 
 
Less Than Twelve Months
 
Twelve Months or More
 
Total
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
 
 
 
 
Unrealized
 
 
 
Unrealized
 
 
 
Unrealized
 
 
 
 
 
Losses
 
Fair Value
 
Losses
 
Fair Value
 
Losses
 
Fair Value
 
 
 
(In Thousands)
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and government sponsored agencies
 
$
(141)
 
$
3,886
 
$
-
 
$
-
 
$
(141)
 
$
3,886
 
Mortgage-backed securities
 
 
(354)
 
 
56,609
 
 
(332)
 
 
11,712
 
 
(686)
 
 
68,321
 
State and municipal securities
 
 
(55)
 
 
15,464
 
 
(47)
 
 
4,531
 
 
(102)
 
 
19,995
 
Corporate debt
 
 
(27)
 
 
2,961
 
 
-
 
 
-
 
 
(27)
 
 
2,961
 
Total
 
$
(577)
 
$
78,920
 
$
(379)
 
$
16,243
 
$
(956)
 
$
95,163
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and government sponsored agencies
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Mortgage-backed securities
 
 
-
 
 
-
 
 
(331)
 
 
17,751
 
 
(331)
 
 
17,751
 
State and municipal securities
 
 
(162)
 
 
19,945
 
 
(166)
 
 
10,820
 
 
(328)
 
 
30,765
 
Corporate debt
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
Total
 
$
(162)
 
$
19,945
 
$
(497)
 
$
28,571
 
$
(659)
 
$
48,516
 
 
At December 31, 2015, 22 of the Company’s 771 debt securities were in an unrealized loss position for more than 12 months. 
The following table summarizes information about sales of debt securities available for sale.
 
 
 
Years Ended December 31,
 
 
 
2015
 
2014
 
2013
 
 
 
(In Thousands)
 
Sale proceeds
 
$
16,738
 
$
173
 
$
4,140
 
Gross realized gains
 
$
29
 
$
3
 
$
131
 
Gross realized losses
 
 
-
 
 
-
 
 
-
 
Net realized gain (loss)
 
$
29
 
$
3
 
$
131
 
 
The carrying value of debt securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2015 and 2014 was $245.5 million and $230.6 million, respectively.
 
Equity securities include (1) a restricted investment in Federal Home Loan Bank of Atlanta stock for membership requirement and to secure available lines of credit, (2) an investment in First National Bankers Bank stock, and (3) an investment in a Community Reinvestment Act (“CRA”)-qualified mutual fund. The amount of investment in the Federal Home Loan Bank of Atlanta stock was $4.0 million and $3.2 million at December 31, 2015 and 2014, respectively. The amount of investment in the First National Bankers Bank stock was $400,000 and $250,000 at December 31, 2015 and 2014, respectively. The amount of investment in the CRA-qualified mutual fund was $503,000 at December 31, 2015 and 2014.