ServisFirst Bancshares, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

DEBT SECURITIES

DEBT SECURITIES

12 Months Ended

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

NOTE 2. DEBT SECURITIES

The amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2013 and 2012 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Market
	Cost		Gain		Loss		Value
	(In Thousands)
December 31, 2013
Securities Available for Sale
U.S. Treasury and government sponsored agencies	$	31,641	$	674	$	(41)	$	32,274
Mortgage-backed securities		85,764		2,574		(98)		88,240
State and municipal securities		127,083		3,430		(682)		129,831
Corporate debt		15,738		163		(26)		15,875
Total		260,226		6,841		(847)		266,220
Securities Held to Maturity
Mortgage-backed securities		26,730		266		(1,422)		25,574
State and municipal securities		5,544		197		-		5,741
Total	$	32,274	$	463	$	(1,422)	$	31,315

December 31, 2012
Securities Available for Sale
U.S. Treasury and government sponsored agencies	$	27,360	$	1,026	$	-	$	28,386
Mortgage-backed securities		69,298		4,168		-		73,466
State and municipal securities		112,319		5,941		(83)		118,177
Corporate debt		13,677		210		(39)		13,848
Total		222,654		11,345		(122)		233,877
Securities Held to Maturity
Mortgage-backed securities		20,429		768		(40)		21,157
State and municipal securities		5,538		655		-		6,193
Total	$	25,967	$	1,423	$	(40)	$	27,350

All mortgage-backed 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 2013 and 2012, there were no holdings of 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 securities as of December 31, 2013 and 2012 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, 2013				December 31, 2012
	Amortized Cost		Market Value		Amortized Cost		Market Value

	(In Thousands)
Securities available for sale
Due within one year	$	5,659	$	5,717	$	11,971	$	12,052
Due from one to five years		102,535		104,887		79,192		81,940
Due from five to ten years		65,174		66,229		59,825		63,801
Due after ten years		1,094		1,147		2,368		2,618
Mortgage-backed securities		85,764		88,240		69,298		73,466
	$	260,226	$	266,220	$	222,654	$	233,877

Securities held to maturity
Due after ten years	$	5,544	$	5,741	$	5,538	$	6,193
Mortgage-backed securities		26,730		25,574		20,429		21,157
	$	32,274	$	31,315	$	25,967	$	27,350

The following table shows the gross unrealized losses and fair value of securities, aggregated by category and length of time that securities have been in a continuous unrealized loss position at December 31, 2013 and 2012. 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, 2013. There were no other-than-temporary impairments for the years ended December 31, 2013, 2012 and 2011.

	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, 2013
U.S. Treasury and government
sponsored agencies	$	(41)	$	5,854	$	-	$	-	$	(41)	$	5,854
Mortgage-backed securities		(852)		21,365		(668)		6,691		(1,520)		28,056
State and municipal securities		(607)		30,666		(75)		3,443		(682)		34,109
Corporate debt		(26)		5,958		-		-		(26)		5,958
Total	$	(1,526)	$	63,843	$	(743)	$	10,134	$	(2,269)	$	73,977

December 31, 2012
U.S. Treasury and government sponsored agencies
Mortgage-backed securities		(40)		4,439		-		-		(40)		4,439
State and municipal securities		(83)		8,801		-		166		(83)		8,967
Corporate debt		(39)		4,882		-		-		(39)		4,882
Total	$	(162)	$	18,122	$	-	$	166	$	(162)	$	18,288

At December 31, 2013, 17 of the Company’s 664 debt securities were in an unrealized loss position for more than 12 months.

During 2013, 28 government agency sponsored mortgage-backed securities with an amortized cost of $50.0 million and 12 U.S. Treasury securities with an amortized cost of $16.6 million were bought. Two corporate bonds were sold for $4.1 million and a realized gain on sale of $131,000. Two corporate bonds with an amortized cost of $6.0 million were also bought during 2013. During 2012, 10 government agency sponsored mortgage-backed securities with an amortized cost of $23.6 million and one government agency bond with an amortized cost of $1.5 million were bought. 15 government agency securities with a total amortized cost of $61.0 million were called during 2012 and three U.S. Treasury securities with an amortized cost of $10.0 million matured. During 2011, 16 government agency bonds with an amortized cost of $63.2 million and 20 government agency sponsored mortgage-backed securities with an amortized cost of $29.9 million were bought. Nine U.S. Treasury notes, six government agency bonds and five government agency sponsored mortgage-backed securities were sold with an amortized cost of $56.1 million and a net gain on sale in the amount of $992,000.

The carrying value of investment securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2013 and 2012 was $210.0 million and $197.9 million, respectively.

Restricted 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, and (2) an investment in First National Bankers Bank stock. The amount of investment in the Federal Home Loan Bank of Atlanta stock was $3.7 million and $3.3 million at December 31, 2013 and 2012, respectively. The amount of investment in the First National Bankers Bank stock was $250,000 at December 31, 2013 and 2012.