5.	SECURITIES

Components of the available for sale portfolio are as follows:


	March 31, 2014
			Gross		Gross
	Amortized		unrealized		unrealized			Fair
	cost		gains		losses			value
	(Dollars in thousands)
Available for Sale
U.S. Treasury and government sponsored entities’ securities	$	247,596	$	1	$	(16,881	)	$	230,716
Equity securities		100		358		—			458
Mortgage-backed GSE securities: residential		297,517		34		(11,337	)		286,214

Total	$	545,213	$	393	$	(28,218	)	$	517,388


	December 31, 2013
			Gross		Gross
	Amortized		unrealized		unrealized			Fair
	cost		gains		losses			value
	(Dollars in thousands)
Available for Sale
U.S. Treasury and government sponsored entities’ securities	$	247,863	$	—	$	(25,570	)	$	222,293
Equity securities		101		344		—			445
Mortgage-backed GSE securities: residential		303,435		31		(15,198	)		288,268

Total	$	551,399	$	375	$	(40,768	)	$	511,006

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


	March 31, 2014
	(Dollars in thousands)
	Amortized		Fair
	Cost		Value
Due in one year or less	$	—	$	—
Due after one year through five years		—		—
Due after five years through ten years		186,149		174,498
Due after ten years through fifteen years		61,447		56,218
Mortgage-backed GSE securities: residential		297,517		286,214

Total	$	545,113	$	516,930

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

There was no tax provision related to net unrealized gains or losses for each of the periods presented due to the full valuation allowance recorded on the net deferred tax asset of the Company.

The Company had no securities pledged for the Company’s participation in the VISA payment processing program at March 31, 2014 and December 31, 2013. Securities pledged for participation in the Ohio Linked Deposit Program were approximately $390,000 at March 31, 2014 and $382,000 at December 31, 2013.

Securities available for sale that have been in an unrealized loss position for less than twelve months or twelve months or more are as follows:


	March 31, 2014
	(Dollars in thousands)
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and government sponsored entities’ securities	$	200,991	$	(13,899	)	$	29,224	$	(2,982	)	$	230,215	$	(16,881	)
Mortgage-backed GSE securities: residential		238,033		(7,655	)		47,433		(3,682	)		285,466		(11,337	)

Total	$	439,024	$	(21,554	)	$	76,657	$	(6,664	)	$	515,681	$	(28,218	)


	December 31, 2013
	(Dollars in thousands)
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and government sponsored entities’ securities	$	193,746	$	(21,360	)	$	28,046	$	(4,210	)	$	221,792	$	(25,570	)
Mortgage-backed GSE securities: residential		240,201		(10,680	)		47,319		(4,518	)		287,520		(15,198	)

Total	$	433,947	$	(32,040	)	$	75,365	$	(8,728	)	$	509,312	$	(40,768	)

All of the U.S. Treasury and government sponsored entities (GSE) and mortgage-backed securities that were temporarily impaired at March 31, 2014 and December 31, 2013, were impaired due to the level of interest rates at that time. Unrealized losses on U.S. Treasury and government sponsored entities and mortgage-backed securities have not been recognized into income as of March 31, 2014 and December 31, 2013 because the issuer’s securities are of high credit quality (rated AA or higher), management does not intend to sell, and it is likely that management will not be required to sell, the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The primary reason for the change in fair value in the first quarter was the decline in longer term interest rates experienced in the first quarter. From April 30, 2013 to March 31, 2014 the 10 year treasury yield rose from 1.70% to 2.73%. The duration of the securities portfolio is approximately 6.7 years at March 31, 2014. There is risk that longer term rates could rise further resulting in greater unrealized losses. Management continues to allow the portfolio to decline as no new investment purchases are being considered. In addition, the Company can look for opportunities to sell securities to reduce the portfolio or change the duration characteristics. All of the securities are GSE issued debt or mortgage-backed securities and carry the same rating as the U.S. Government.

At March 31, 2014 and December 31, 2013, all of the mortgage-backed securities held by the Company were issued by U.S. government sponsored agencies, primarily Fannie Mae and Freddie Mac, institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2014 and December 31, 2013.

Proceeds from sales of securities available for sale were $4,000 and $27.9 million for the three months ended March 31, 2014 and 2013, respectively. Gross gains of $3,000 and $721,000 were realized on these sales during the first quarter of 2014 and 2013, respectively.