Securities

6 Months Ended

Jun. 30, 2011

Securities [Abstract]

SECURITIES

5. SECURITIES

Components of the available for sale portfolio are as follows:

	June 30, 2011
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Treasury and government sponsored entities’ securities	$	64,598	$	379	$	—		$	64,977
Equity securities		164		140		—			304
Mortgage-backed securities GSE issued:
residential		325,868		2,051		(451	)		327,468
Total	$	390,630	$	2,570	$	(451	)	$	392,749

	December 31, 2010
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Treasury and government sponsored entities’ securities	$	65,099	$	—	$	(2,164	)	$	62,935
Equity securities		235		159		—			394
Mortgage-backed securities GSE issued:
residential		300,290		1,688		(3,265	)		298,713
Total	$	365,624	$	1,847	$	(5,429	)	$	362,042

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

	June 30, 2011
	Amortized cost		Fair value
	(Dollars in thousands)
Due in one year or less	$	—	$	—
Due after one year through five years		—		—
Due after five years through ten years		64,598		64,977
Mortgage-related securities		325,867		327,468
Total	$	390,465	$	392,445

Securities pledged for the Company’s investment in VISA stock were approximately $5.8 million at June 30, 2011 and $5.7 million at December 31, 2010. Securities pledged for public funds deposits were $400,000 at June 30, 2011, and $864,000 at December 31, 2010. Securities sold under an agreement to repurchase are secured primarily by mortgage-backed securities with a fair value of approximately $129.1 million at June 30, 2011, and $129.4 million at December 31, 2010.

United Community had no securities classified as trading as of June 30, 2011 or December 31, 2010.

The following table summarizes the investment securities with unrealized losses at June 30, 2011 and December 31, 2010 by aggregated major security type and length of time in a continuous unrealized loss position:

	June 30, 2011
	(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	$	—	$	—		$	—	$	—	$	—	$	—
Mortgage-backed securities GSE issued: residential		130,312		(451	)		—		—		130,312		(451	)
Total	$	130,312	$	(451	)	$	—	$	—	$	130,312	$	(451	)

	December 31, 2010
	(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	$	62,935	$	(2,164	)	$	—	$	—	$	62,935	$	(2,164	)
Mortgage-backed securities GSE issued: residential		203,569		(3,265	)		—		—		203,569		(3,265	)
Total	$	266,504	$	(5,429	)	$	—	$	—	$	266,504	$	(5,429	)

All of the U.S. Treasury and government sponsored entities’ mortgage backed securities that were temporarily impaired at June 30, 2011, were impaired due to the current level of interest rates. All of these securities continue to pay on schedule and management expects to receive all principal and interest owed on these securities.

Proceeds from sales of securities available for sale were $115.9 million and $174.0 million for the six months ended June 30, 2011 and 2010, respectively. Gross gains of $1.5 million and $6.5 million and no gross losses were realized on these sales during the first six months of 2011 and 2010, respectively.

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 realize an Other Than Temporary Impairment (OTTI) charge on the security. 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 $38,000 OTTI charge on equity investments in two other financial institutions in the first six months of 2011. One financial institution consented to a regulatory enforcement action, diminishing the chance of fair value recovery in the foreseeable future. The other investment was trading below book value and management was not able to determine with reasonable certainty that recovery would occur in the near-term.

As of June 30, 2011, the Company’s security portfolio consisted of 36 securities, 11 of which were in an unrealized loss position totaling approximately $451,000.