4. Securities

Securities available-for-sale at December 31, 2014 and 2013 are as follows:


	December 31, 2014								December 31, 2013
	Amortized Cost		Unrealized				Fair Value		Amortized Cost		Unrealized					Fair Value
	Amortized Cost		Gains		Losses		Fair Value		Amortized Cost		Gains		Losses			Fair Value
U.S. Gov’t sponsored entities		$155,482		$2,301		$(2,219)		$155,564		$185,205		$2,894	$	(6,474	)		$181,625
State & political subdivisions		174,600		6,804		(402)		181,002		176,490		3,770		(2,317	)		177,943
Residential & multi-family mortgage		265,678		2,291		(2,805)		265,164		248,017		2,410		(7,820	)		242,607
Commercial mortgage		0		0		0		0		385		0		(11	)		374
Corporate notes & bonds		20,791		139		(1,500)		19,430		15,744		65		(1,734	)		14,075
Pooled trust preferred		800		105		0		905		800		0		(139	)		661
Pooled SBA		63,139		1,074		(1,560)		62,653		70,077		688		(3,044	)		67,721
Other securities		1,020		0		(18)		1,002		1,020		0		(35	)		985

Total		$681,510		$12,714		$(8,504)		$685,720		$697,738		$9,827		$(21,574)			$685,991

At December 31, 2014 and 2013, there were no holdings of securities by any one issuer, other than U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities, and the Corporation holds one commercial mortgage security that is private label.

Trading securities at December 31, 2014 and 2013 are as follows:


	2014		2013

Corporate equity securities	$	3,044	$	2,705
Certificates of deposit		253		253
International mutual funds		265		259
Large cap growth mutual funds		186		197
Money market mutual funds		157		124
Large cap value mutual funds		132		129
Corporate notes and bonds		155		152
Real estate investment trust mutual funds		46		39
U.S. Government sponsored entities		54		52
Small cap mutual funds		80		83
Mid cap mutual funds		83		84
Commodities mutual funds		50		50

Total	$	4,505	$	4,127

Securities with unrealized losses at December 31, 2014 and 2013, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:


December 31, 2014	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Gov’t sponsored entities	$	26,069	$	(149	)	$	85,016	$	(2,070	)	$	111,085	$	(2,219	)
State & political subdivisions		16,398		(179	)		12,363		(223	)		28,761		(402	)
Residential & multi-family mortgage		70,360		(603	)		99,397		(2,202	)		169,757		(2,805	)
Corporate notes & bonds		5,008		(30	)		7,935		(1,470	)		12,943		(1,500	)
Pooled SBA		0		(0	)		34,608		(1,560	)		34,608		(1,560	)
Other securities		0		(0	)		1,002		(18	)		1,002		(18	)

	$	117,835	$	(961	)	$	240,321	$	(7,543	)	$	358,156	$	(8,504	)


	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2013
U.S. Gov’t sponsored entities	$	95,677	$	(5,394	)	$	17,964	$	(1,080	)	$	113,641	$	(6,474	)
State & political subdivisions		57,526		(2,192	)		5,324		(125	)		62,850		(2,317	)
Residential and multi-family mortgage		150,229		(6,806	)		16,608		(1,014	)		166,837		(7,820	)
Commercial mortgage		374		(11	)		0		0			374		(11	)
Corporate notes & bonds		0		0			9,662		(1,734	)		9,662		(1,734	)
Pooled trust preferred		0		0			661		(139	)		661		(139	)
Pooled SBA		36,842		(2,296	)		8,277		(748	)		45,119		(3,044	)
Other securities		985		(35	)		0		0			985		(35	)

	$	341,633	$	(16,734	)	$	58,496	$	(4,840	)	$	400,129	$	(21,574	)

The Corporation evaluates securities for other-than-temporary impairment on a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

The following table provides detailed information related to the Corporation’s structured pooled trust preferred securities as of December 31, 2014 and for the years ended December 31, 2014, 2013, and 2012:


	As of December 31, 2014						Credit Losses Realized in Earnings
	Adjusted Amortized		Unrealized		Fair		Year Ended December 31,
	Cost		Gain (Loss)		Value		2014		2013		2012
ALESCO Preferred Funding V, Ltd.	$	800	$	105	$	905	$	0	$	0	$	0
ALESCO Preferred Funding XII, Ltd.		0		0		0		0		0		0
ALESCO Preferred Funding XVII, Ltd.		0		0		0		0		0		0
Preferred Term Securities XVI, Ltd.		0		0		0		0		0		0
US Capital Funding VI, Ltd.		0		0		0		0		0		0

Total	$	800	$	105	$	905	$	0	$	0	$	0

At December 31, 2014, the Corporation evaluated the ALESCO Preferred Funding V, Ltd. Security for other than-temporary impairment by estimating the cash flows expected to be received, taking into account future estimated levels of deferrals and defaults by the underlying issuers and discounting those cash flows at the appropriate accounting yield.

A roll-forward of the other-than-temporary impairment amount related to credit losses for the years ended December 31, 2014, 2013 and 2012 is as follows:


	2014		2013		2012

Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, beginning of period	$	4,054	$	4,054	$	4,054
Additional credit loss for which other-than-temporary impairment was not previously recognized		0		0		0
Additional credit loss for which other-than-temporary impairment was previously recognized		0		0		0

Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, end of period	$	4,054	$	4,054	$	4,054

The adjusted amortized cost of structured pooled trust preferred securities as of December 31, 2014 and 2013, is insignificant.

For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed, as appropriate given the following considerations. When reviewing securities for other-than-temporary impairment, management considers the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred. Management also considers the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

As of December 31, 2014 and 2013, management concluded that the securities described in the previous paragraph were not other-than-temporarily impaired for the following reasons:

—

There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.

—

All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.

The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis.

On December 31, 2014 and 2013, securities carried at $325,799 and $353,102, respectively, were pledged to secure public deposits and for other purposes as provided by law.

The following is a schedule of the contractual maturity of securities available for sale, excluding equity securities, at December 31, 2014:


	December 31, 2014
	Amortized Cost		Fair Value
1 year or less	$	31,591	$	31,482
1 year – 5 years		171,052		174,004
5 years – 10 years		113,175		115,663
After 10 years		35,855		35,752

		351,673		356,901
Residential and multi-family mortgage		265,678		265,164
Pooled SBA		63,139		62,653

Total debt securities	$	680,490	$	684,718

Mortgage securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.

Information pertaining to security sales is as follows:


Year ended December 31	Proceeds		Gross Gains		Gross Losses

2014	$	61,236	$	606	$	177
2013		35,633		849		494
2012		125,579		1,809		430

The tax provision related to these net realized gains was $150, $124, and $483, respectively.

During 2014, 2013 and 2012, the Corporation sold trading securities. Proceeds were $248 in 2014, $5,811 in 2013, and $3,386 in 2012, resulting in net gains of $10 in 2014, $579 in 2013, and $298 in 2012.