Securities

12 Months Ended

Dec. 31, 2012

Securities [Abstract]

SECURITIES

4. SECURITIES

The components of securities are as follows:

	December 31, 2012
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(Dollars in thousands)
Available for Sale
U.S. Treasury and government sponsored entities’ securities	$	161,845	$	2,409	$	(562	)	$	163,692
Equity securities		101		212		—			313
Mortgage-backed GSE securities: residential		404,563		6,142		(148	)		410,557
Total	$	566,509	$	8,763	$	(710	)	$	574,562
	December 31, 2011
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(Dollars in thousands)
Available for Sale
U.S. Treasury and government sponsored entities’ securities	$	50,003	$	797	$	—		$	50,800
Equity securities		114		149		—			263
Mortgage-backed GSE securities: residential		403,943		4,592		—			408,535
Total	$	454,060	$	5,538	$	—		$	459,598

Debt securities available for sale by contractual maturity, repricing or expected call date are shown below:

	December 31, 2012
	Amortized cost		Fair value
	(Dollars in thousands)
Due in one year or less	$	—	$	—
Due after one year through five years		500		500
Due after five years through ten years		72,345		73,724
Due after ten years		89,000		89,468
Mortgage-backed GSE securities: residential		404,563		410,557
Total	$	566,408	$	574,249

Since equity securities do not have a contractual maturity, they are excluded from the table above.

Proceeds, gross realized gains, losses and impairment charges of available for sale securities were as follows:

	2012			2011			2010
	(Dollars in thousands)
Proceeds	$	343,000		$	428,396		$	396,291
Gross gains		6,325			8,662			8,970
Gross losses		—			(29	)		(167	)
Impairment charges		(13	)		(89	)		(58	)

The tax benefit (provision) related to net realized gains and losses was $0, $0, and $(380,000), respectively.

Securities pledged for the Company’s participation in the VISA payment processing program were approximately $5.8 million at December 31, 2012 and $5.7 million at December 31, 2011. Securities pledged for participation in the Ohio Linked Deposit Program were approximately $417,000 and $418,000 at December 31, 2012 and 2011, respectively. See further discussion regarding pledged securities in Note 12.

Securities available for sale in an unrealized loss position are as follows at December 31, 2012:

	Less than 12 months					12 months or more				Total
	Fair value		Unrealized loss			Fair value		Unrealized loss		Fair value		Unrealized loss
	(Dollars in thousands)
Description of securities:
U.S. Treasury and government sponsored entities	$	42,480	$	(562	)	$	—	$	—	$	42,480	$	(562	)
Mortgage-backed GSE securities: residential		72,020		(148	)		—		—		72,020		(148	)
Total temporarily impaired securities	$	114,500	$	(710	)	$	—	$	—	$	114,500	$	(710	)

All of the U.S. Treasury and government sponsored entities and mortgage-backed securities that were temporarily impaired at December 31, 2012, were impaired due to the level of interest rates at that time.

United Community had no securities available for sale in an unrealized loss position at December 31, 2011.

The Company evaluates its equity securities for impairment on a quarterly basis. In general, if a security has been in an unrealized loss position for more than twelve months, the Company will recognize an OTTI charge on the security. The Company’s equity security portfolio is comprised of common stock of various financial institutions. If the security has been in an unrealized loss position for less than twelve months, the Company examines the capital levels, nonperforming asset ratios and liquidity position of the issuer to determine whether or not an OTTI charge is appropriate.

The Company recognized a $13,000 OTTI charge on an equity investment in one financial institution in 2012. The Company recognized an $89,000 OTTI charge on equity investments in four financial institutions in 2011. The Company recognized a $58,000 OTTI charge in 2010. Based upon reviews of the financial institutions’ capital structure, nonperforming assets ratios and liquidity levels, the chance for recovery in the foreseeable future appeared remote.