Note 5 – Securities

The amortized cost basis, unrealized gains and losses and fair value of securities held-to-maturity as of the dates indicated are as follows (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of June 30, 2016	Cost		Gains		Losses		Value

State and political subdivisions	$	61,547	$	4,782	$	1	$	66,328
Mortgage-backed securities⁽¹⁾		280,404		10,014		6		290,412

Total	$	341,951	$	14,796	$	7	$	356,740

As of December 31, 2015

State and political subdivisions	$	62,073	$	3,211	$	-	$	65,284
Mortgage-backed securities⁽¹⁾		302,623		5,424		1,673		306,374

Total	$	364,696	$	8,635	$	1,673	$	371,658

⁽¹⁾ All are residential type mortgage-backed securities or U.S. government agency commercial mortgage backed securities.

The cost basis, unrealized gains and losses, and fair value of securities available-for-sale as of the dates indicated are presented below (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of June 30, 2016	Cost		Gains		Losses		Value

U.S. Treasuries	$	140,537	$	5,021	$	-	$	145,558
U.S. Government agencies		38,659		726		-		39,385
State and political subdivisions		68,962		2,145		-		71,107
Mortgage-backed securities⁽¹⁾		1,218,928		24,653		1,560		1,242,021
Corporate bonds		307,653		4,631		1,161		311,123
Asset-backed securities		527,852		1,484		4,144		525,192
Other		1,125		-		-		1,125

Total	$	2,303,716	$	38,660	$	6,865	$	2,335,511

As of December 31, 2015

U.S. Treasuries	$	169,034	$	156	$	484	$	168,706
U.S. Government agencies		112,394		385		439		112,340
State and political subdivisions		56,265		461		458		56,268
Mortgage-backed securities⁽¹⁾		1,108,206		12,077		7,165		1,113,118
Corporate bonds		308,102		933		3,009		306,026
Asset-backed securities		538,679		569		6,006		533,242
Other		1,811		-		-		1,811

Total	$	2,294,491	$	14,581	$	17,561	$	2,291,511

⁽¹⁾ All are residential type mortgage-backed securities or U.S. government agency commercial mortgage backed securities.

Securities with a carrying value of $1.31 billion and $1.63 billion were pledged to secure public deposits, derivatives and other secured borrowings at June 30, 2016 and December 31, 2015, respectively.

The following table summarizes held-to-maturity securities in an unrealized loss position as of the dates indicated (in thousands).

	Less than 12 Months				12 Months or More				Total
As of June 30, 2016	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

State and political subdivisions	$	512	$	1	$	-	$	-	$	512	$	1
Mortgage-backed securities		-		-		1,406		6		1,406		6
Total unrealized loss position	$	512	$	1	$	1,406	$	6	$	1,918	$	7

As of December 31, 2015

Mortgage-backed securities	$	140,362	$	1,331	$	13,127	$	342	$	153,489	$	1,673
Total unrealized loss position	$	140,362	$	1,331	$	13,127	$	342	$	153,489	$	1,673

The following table summarizes available-for-sale securities in an unrealized loss position as of the dates indicated (in thousands).

	Less than 12 Months				12 Months or More				Total
As of June 30, 2016	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Mortgage-backed securities	$	31,875	$	124	$	108,620	$	1,436	$	140,495	$	1,560
Corporate bonds		64,166		661		500		500		64,666		1,161
Asset-backed securities		207,774		2,990		109,599		1,154		317,373		4,144
Total unrealized loss position	$	303,815	$	3,775	$	218,719	$	3,090	$	522,534	$	6,865

As of December 31, 2015

U.S. Treasuries	$	126,066	$	484	$	-	$	-	$	126,066	$	484
U.S. Government agencies		74,189		439		-		-		74,189		439
State and political subdivisions		27,014		458		-		-		27,014		458
Mortgage-backed securities		274,005		2,580		173,254		4,585		447,259		7,165
Corporate bonds		221,337		2,759		750		250		222,087		3,009
Asset-backed securities		358,940		5,746		4,816		260		363,756		6,006
Total unrealized loss position	$	1,081,551	$	12,466	$	178,820	$	5,095	$	1,260,371	$	17,561

At June 30, 2016, there were 93 available-for-sale securities and 2 held-to-maturity securities that were in an unrealized loss position. United does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized losses at June 30, 2016 were primarily attributable to changes in interest rates and spread relationships.

Management evaluates securities for other-than-temporary impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to 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, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. No impairment charges were recognized during the three or six months ended June 30, 2016 or 2015.

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes available-for-sale securities sales activity for the three and six months ended June 30, 2016 and 2015 (in thousands).

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015

Proceeds from sales	$	26,992		$	67,350	$	88,297		$	136,817

Gross gains on sales	$	285		$	13	$	958		$	1,552
Gross losses on sales		(3	)		-		(297	)		-

Net gains on sales of securities	$	282		$	13	$	661		$	1,552

Income tax expense attributable to sales	$	106		$	5	$	247		$	603

The amortized cost and fair value of held-to-maturity and available-for-sale securities at June 30, 2016, by contractual maturity, are presented in the following table (in thousands).

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value

US Treasuries:
1 to 5 years	$	66,014	$	67,801	$	-	$	-
5 to 10 years		74,523		77,757		-		-
		140,537		145,558		-		-

US Government agencies:
1 to 5 years		8,310		8,360		-		-
5 to 10 years		30,349		31,025		-		-
		38,659		39,385		-		-

State and political subdivisions:
Within 1 year		926		940		5,017		5,069
1 to 5 years		9,589		9,838		14,170		15,109
5 to 10 years		52,311		53,917		22,357		25,107
More than 10 years		6,136		6,412		20,003		21,043
		68,962		71,107		61,547		66,328

Corporate bonds:
1 to 5 years		223,094		224,777		-		-
5 to 10 years		83,559		85,846		-		-
More than 10 years		1,000		500		-		-
		307,653		311,123		-		-

Asset-backed securities:
1 to 5 years		27,357		27,704		-		-
5 to 10 years		304,376		302,060		-		-
More than 10 years		196,119		195,428		-		-
		527,852		525,192		-		-

Other:
More than 10 years		1,125		1,125		-		-
		1,125		1,125		-		-

Total securities other than mortgage-backed securities:
Within 1 year		926		940		5,017		5,069
1 to 5 years		334,364		338,480		14,170		15,109
5 to 10 years		545,118		550,605		22,357		25,107
More than 10 years		204,380		203,465		20,003		21,043

Mortgage-backed securities		1,218,928		1,242,021		280,404		290,412

	$	2,303,716	$	2,335,511	$	341,951	$	356,740

Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations.