SECURITIES AVAILABLE-FOR-SALE

The following table indicates the composition of the securities available-for-sale portfolio as of the dates presented:



	September 30, 2014									December 31, 2013
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	14,863	$	—	$	(60	)	$	14,803	$	—	$	—	$	—		$	—
Obligations of U.S. government corporations and agencies	263,254		1,930		(1,778		)	263,406		235,181		2,151		(2,581		)	234,751
Collateralized mortgage obligations of U.S. government corporations and agencies	110,626		644		(217		)	111,053		63,776		601		(603		)	63,774
Residential mortgage-backed securities of U.S. government corporations and agencies	43,405		1,429		(253		)	44,581		47,934		1,420		(685		)	48,669
Commercial mortgage-backed securities of U.S. government corporations and agencies	39,967		80		(667		)	39,380		40,357		—		(1,305		)	39,052
Obligations of states and political subdivisions	129,133		4,952		(140		)	133,945		115,572		1,294		(2,602		)	114,264
Debt Securities	601,248		9,035		(3,115		)	607,168		502,820		5,466		(7,776		)	500,510
Marketable equity securities	7,579		910		—			8,489		7,579		1,336		—			8,915
Total	$	608,827	$	9,945	$	(3,115	)	$	615,657	$	510,399	$	6,802	$	(7,776	)	$	509,425

Realized gains and losses on the sale of securities are determined using the specific-identification method. The following table shows the composition of gross and net realized gains and losses for the periods presented:



	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2014		2013		2014		2013
Gross realized gains	$	—	$	3	$	41	$	5
Gross realized losses	—		—		—		—
Net Realized Gains	$	—	$	3	$	41	$	5

The following tables indicate the fair value and the age of gross unrealized losses by investment category as of the dates presented:



	September 30, 2014
	Less Than 12 Months						12 Months or More						Total
(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses
U.S. Treasury securities	3	$	14,803	$	(60	)	—	$	—	$	—		3	$	14,803	$	(60	)
Obligations of U.S. government corporations and agencies	9	83,654		(377		)	8	62,754		(1,401		)	17	146,408		(1,778		)
Collateralized mortgage obligations of U.S. government corporations and agencies	6	71,273		(217		)	—	—		—			6	71,273		(217		)
Residential mortgage-backed securities of U.S. government corporations and agencies	—	—		—			1	9,118		(253		)	1	9,118		(253		)
Commercial mortgage-backed securities of U.S. government corporations and agencies	1	9,927		(97		)	2	20,546		(570		)	3	30,473		(667		)
Obligations of states and political subdivisions	3	12,313		(3		)	2	10,715		(137		)	5	23,028		(140		)
Total Temporarily Impaired Securities	22	$	191,970	$	(754	)	13	$	103,133	$	(2,361	)	35	$	295,103	$	(3,115	)



	December 31, 2013
	Less Than 12 Months						12 Months or More						Total
(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses
U.S. Treasury securities	—	$	—	$	—		—	$	—	$	—		$	—	$	—	$	—
Obligations of U.S. government corporations and agencies	16	126,017		(2,581		)	—	—		—			16		126,017		(2,581		)
Collateralized mortgage obligations of U.S. government corporations and agencies	3	39,522		(603		)	—	—		—			3		39,522		(603		)
Residential mortgage-backed securities of U.S. government corporations and agencies	2	22,822		(685		)	—	—		—			2		22,822		(685		)
Commercial mortgage-backed securities of U.S. government corporations and agencies	4	39,052		(1,305		)	—	—		—			4		39,052		(1,305		)
Obligations of states and political subdivisions	16	47,529		(1,739		)	2	10,088		(863		)	18		57,617		(2,602		)
Debt Securities	41	274,942		(6,913		)	2	10,088		(863		)	43		285,030		(7,776		)
Marketable equity securities	—	—		—			—	—		—			—		—		—
Total Temporarily Impaired Securities	41	$	274,942	$	(6,913	)	2	$	10,088	$	(863	)	43		$	285,030	$	(7,776	)

We do not believe any individual unrealized loss as of September 30, 2014 represents an other than temporary impairment, or OTTI. As of September 30, 2014, the unrealized losses on 35 debt securities were attributable to changes in interest rates and not related to the credit quality of these securities. All debt securities are determined to be investment grade and are paying principal and interest according to the contractual terms of the security. There were no unrealized losses on marketable equity securities as of September 30, 2014. We do not intend to sell and it is not more likely than not that we will be required to sell any of the securities, referenced in the table above, in an unrealized loss position before recovery of their amortized cost.

The following table displays net unrealized gains and losses, net of tax on securities available for sale included in accumulated other comprehensive income/(loss) for the periods presented:



	September 30, 2014							December 31, 2013
(dollars in thousands)	Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
Total unrealized gains/(losses) on securities available-for-sale	$	9,945	$	(3,115	)	$	6,830	$	6,802	$	(7,776	)	$	(974	)
Income tax expense/(benefit)	3,480		(1,090		)	2,390		2,381		(2,722		)	(341		)
Net unrealized gains/(losses), net of tax included in accumulated other comprehensive income/(loss)	$	6,465	$	(2,025	)	$	4,440	$	4,421	$	(5,054	)	$	(633	)

The amortized cost and fair value of securities available-for-sale at September 30, 2014, by contractual maturity, are included in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	September 30, 2014
(dollars in thousands)	Amortized Cost		Fair Value
Obligations of the U.S. Treasury and U.S. government corporations and agencies, and obligations of states and political subdivisions
Due in one year or less	$	20,713	$	20,936
Due after one year through five years	202,379		202,439
Due after five years through ten years	90,813		91,899
Due after ten years	93,345		96,880
	407,250		412,154
Collateralized mortgage obligations of U.S. government corporations and agencies	110,626		111,053
Residential mortgage-backed securities of U.S. government corporations and agencies	43,405		44,581
Commercial mortgage-backed securities of U.S. government corporations and agencies	39,967		39,380
Debt Securities	601,248		607,168
Marketable equity securities	7,579		8,489
Total	$	608,827	$	615,657

At September 30, 2014 and December 31, 2013, securities with carrying values of $314.8 million and $243.2 million were pledged for various regulatory and legal requirements.