4. Securities

Securities available-for-sale at December 31, 2015 and 2014 are as follows:


	December 31, 2015								December 31, 2014
	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		$141,300		$1,579		$(1,128)		$141,751		$155,482		$2,301	$	(2,219	)		$155,564
State & political subdivisions		165,828		6,234		(243)		171,819		174,600		6,804		(402	)		181,002
Residential & multi-family mortgage		160,316		1,060		(3,394)		157,982		265,678		2,291		(2,805	)		265,164
Corporate notes & bonds		19,794		165		(1,271)		18,688		20,791		139		(1,500	)		19,430
Pooled trust preferred		800		2,613		0		3,413		800		105		0			905
Pooled SBA		51,556		760		(907)		51,409		63,139		1,074		(1,560	)		62,653
Other equity securities		1,020		0		(39)		981		1,020		0		(18	)		1,002

Total		$540,614		$12,411		$(6,982)		$546,043		$681,510		$12,714		$(8,504)			$685,720

At December 31, 2015 and 2014, 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, 2015 and 2014 are as follows:


	2015		2014

Corporate equity securities	$	3,389	$	3,044
Mutual Funds		750		999
Cerfiticates of deposit		253		253
Corporate notes and bonds		130		155
U.S. Government sponsored entities		54		54

Total	$	4,576	$	4,505

Securities with unrealized losses at December 31, 2015 and 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:


December 31, 2015	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	$	65,675	$	(640	)	$	31,923	$	(488	)	$	97,598	$	(1,128	)
State & political subdivisions		9,103		(234	)		2,478		(9	)		11,581		(243	)
Residential & multi-family mortgage		69,631		(1,562	)		50,351		(1,832	)		119,982		(3,394	)
Corporate notes & bonds		5,027		(2	)		8,144		(1,269	)		13,171		(1,271	)
Pooled SBA		2,908		(28	)		27,127		(879	)		30,035		(907	)
Other equity securities		0		(0	)		981		(39	)		981		(39	)

	$	152,344	$	(2,466	)	$	121,004	$	(4,516	)	$	273,348	$	(6,982	)



	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2014
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 and 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 equity securities		0		(0	)		1,002		(18	)		1,002		(18	)

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

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, 2015 and for the years ended December 31, 2015, 2014, and 2013:


	As of December 31, 2015						Credit Losses Realized in Earnings
	Adjusted Amortized		Unrealized		Fair		Year Ended December 31,
	Cost		Gain (Loss)		Value		2015		2014		2013
ALESCO Preferred Funding V, Ltd.	$	800	$	370	$	1,170	$	0	$	0	$	0
ALESCO Preferred Funding XII, Ltd.		0		1,021		1,021		0		0		0
ALESCO Preferred Funding XVII, Ltd.		0		588		588		0		0		0
Preferred Term Securities XVI, Ltd.		0		634		634		0		0		0
US Capital Funding VI, Ltd.		0		0		0		0		0		0

Total	$	800	$	2,613	$	3,413	$	0	$	0	$	0

At December 31, 2015, the Corporation evaluated the pooled trust preferred securities 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, 2015, 2014 and 2013 is as follows:


	2015		2014		2013

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, 2015 and 2014, 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, 2015 and 2014, 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, 2015 and 2014, securities carried at $312,669 and $325,799, 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, 2015:


	December 31, 2015
	Amortized Cost		Fair Value
1 year or less	$	21,183	$	21,393
1 year – 5 years		192,677		197,124
5 years – 10 years		87,654		88,913
After 10 years		26,208		28,241

		327,722		335,671
Residential and multi-family mortgage		160,316		157,982
Pooled SBA		51,556		51,409

Total debt securities	$	539,594		545,062

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

2015	$	105,066	$	1,032	$	366
2014		61,236		606		177
2013		35,633		849		494

The tax provision related to these net realized gains was $233, $150, and $124, respectively.

During 2015, 2014 and 2013, the Corporation sold trading securities. Proceeds were $2,129 in 2015, $248 in 2014, and $5,811 in 2013, resulting in net (losses) gains of ($211) in 2015, $10 in 2014, and $579 in 2013.