NOTE D — SECURITIES

The amortized cost and fair value of securities available for sale and held for investment at March 31, 2016 and December 31, 2015 are summarized as follows:

	March 31, 2016
	Gross		Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	13,693	$	305	$	0	$	13,998
Mortgage-backed securities of U.S. Government Sponsored Entities		206,630		2,855		(349)		209,136
Collateralized mortgage obligations of U.S. Government Sponsored Entities		297,383		1,982		(1,531)		297,834
Private mortgage backed securities		32,610		0		(998)		31,612
Private collateralized mortgage obligations		82,940		560		(1,242)		82,258
Collateralized loan obligations		124,561		0		(3,393)		121,168
Obligations of state and political subdivisions		57,659		1,879		(18)		59,520
Corporate and other debt securities		46,048		328		(204)		46,172
Private commercial mortgage backed securities		43,771		246		(533)		43,484
	$	905,295	$	8,155	$	(8,268)	$	905,182

SECURITIES HELD FOR INVESTMENT
Mortgage-backed securities of U.S. Government Sponsored Entities	$	64,718	$	2,702	$	0	$	67,420
Collateralized mortgage obligations of
U.S. Government Sponsored Entities		84,346		1,890		0		86,236
Collateralized loan obligations		41,389		0		(3,853)		37,536
Private collateralized mortgage obligations		7,778		0		(150)		7,628
	$	198,231	$	4,592	$	(4,003)	$	198,820

	December 31, 2015
	Gross		Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	3,833	$	78	$	0	$	3,911
Mortgage-backed securities of U.S. Government Sponsored Entities		192,224		847		(1,322)		191,749
Collateralized mortgage obligations of
U.S. Government Sponsored Entities		242,620		470		(4,900)		238,190
Private mortgage backed securities		32,558		0		(766)		31,792
Private collateralized mortgage obligations		77,965		700		(708)		77,957
Collateralized loan obligations		124,477		0		(1,894)		122,583
Obligations of state and political subdivisions		39,119		882		(110)		39,891
Corporate and other debt securities		44,652		37		(416)		44,273
Private commercial mortgage backed securities		41,127		13		(720)		40,420
	$	798,575	$	3,027	$	(10,836)	$	790,766

SECURITIES HELD FOR INVESTMENT
Mortgage-backed securities of U.S. Government Sponsored Entities	$	64,993	$	574	$	(16)	$	65,551
Collateralized mortgage obligations of U.S. Government Sponsored Entities		89,265		581		(406)		89,440
Collateralized loan obligations		41,300		0		(1,360)		39,940
Private collateralized mortgage obligations		7,967		0		(85)		7,882
	$	203,525	$	1,155	$	(1,867)	$	202,813

Proceeds from sales of securities during the three month period ended March 31, 2016 were $10.4 million, with gross gains of $100,000 and gross losses of $11,000. No sales of securities were transacted during the three month period ended March 31, 2015.

In 2014, approximately $158.8 million of investment securities available for sale were transferred into held for investment. The unrealized holding losses at the date of transfer totaled $3.1 million. For the securities transferred into the held for investment category from available for sale, unrealized holding losses at the date of the transfer will continue to be reported in other comprehensive income, and will be amortized over the remaining life of these securities as an adjustment of yield in a manner consistent with the amortization of a discount. The amortization of unrealized holding losses reported in equity will offset the effect on interest income of the amortization of the discount. At March 31, 2016, the remaining unrealized holding losses totaled $2.3 million.

Securities at March 31, 2016 with a carrying and fair value of $169.6 million and $165.0 million, respectively, were pledged as collateral for United States Treasury deposits, other public deposits and trust deposits. Securities with a carrying value and fair value of $198.3 million were pledged as collateral for repurchase agreements.

The amortized cost and fair value of securities at March 31, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties.

	Held for Investment				Available for Sale
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in less than one year	$	0	$	0	$	4,779	$	4,853
Due after one year through five years		0		0		73,041		72,962
Due after five years through ten years		41,389		37,536		119,832		117,893
Due after ten years		0		0		35,545		36,416
		41,389		37,536		233,197		232,124
Mortgage-backed securities of U.S. Government Sponsored Entities		64,718		67,420		206,630		209,136
Collateralized mortgage obligations of U.S. Government Sponsored Entities		84,346		86,236		297,383		297,834
Private mortgage backed securities		0		0		32,610		31,612
Private collateralized mortgage obligations		7,778		7,628		82,940		82,258
Other debt securities		0		0		8,764		8,734
Private commercial mortgage backed securities		0		0		43,771		43,484
	$	198,231	$	198,820	$	905,295	$	905,182

The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flows analyses, using observable market data where available. The tables below indicate the amount of securities with unrealized losses and period of time for which these losses were outstanding at March 31, 2016 and December 31, 2015, respectively.

	March 31, 2016
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securties of U.S. Governement Sponsored Entities	$	30,876	$	(231)	$	6,201	$	(118)	$	37,077	$	(349)
Collateralized mortgage obligations of U.S. Government Sponsored Entities		4,005		(46)		126,260		(1,485)		130,265		(1,531)
Private mortage backed securities		17,252		(668)		14,359		(330)		31,611		(998)
Private collateralized mortgage obligations		11,883		(232)		50,301		(1,160)		62,184		(1,392)
Collateralized loan obligations		98,879		(4,479)		59,826		(2,767)		158,705		(7,246)
Obligations of state and political subdivisions		3,012		(18)		0		0		3,012		(18)
Corporate and other debt securities		16,713		(204)		0		0		16,713		(204)
Private commercial mortgage backed securities		29,348		(533)		0		0		29,348		(533)
Total temporarily impaired securities	$	211,968	$	(6,411)	$	256,947	$	(5,860)	$	468,915	$	(12,271)

	December 31, 2015
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securties of U.S. Governement Sponsored Entities	$	112,236	$	(1,082)	$	14,508	$	(256)	$	126,744	$	(1,338)
Collateralized mortgage obligations of U.S. Government Sponsored Entities		97,512		(973)		147,266		(4,333)		244,778		(5,306)
Private mortage backed securities		31,792		(766)		0		0		31,792		(766)
Private collateralized mortgage obligations		19,939		(321)		31,533		(472)		51,472		(793)
Collateralized loan obligations		101,601		(1,642)		60,922		(1,612)		162,523		(3,254)
Obligations of state and political subdivisions		11,570		(110)		0		0		11,570		(110)
Corporate and other debt securities		31,342		(416)		0		0		31,342		(416)
Private commercial mortgage backed securities		37,838		(720)		0		0		37,838		(720)
Total temporarily impaired securities	$	443,830	$	(6,030)	$	254,229	$	(6,673)	$	698,059	$	(12,703)

The two tables above include securities held to maturity that were transferred from available for sale into held to maturity during 2014. These securities have unrealized losses of $2.3 million remaining at March 31, 2016 to be amortized.

At March 31, 2016, private label securities with a fair value of $93.8 million secured by collateral originated in 2005 and prior were in an unrealized loss position. Their unrealized loss position of approximately $2.4 million is attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The collateral underlying these mortgage investments are 30- and 15-year fixed and 10/1 adjustable rate mortgage loans with low loan to values, subordination and all historically have had minimal foreclosures. Based on its assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

At March 31, 2016, the Company also had $1.9 million of unrealized losses on collateralized mortgage obligations and mortgage backed securities of government sponsored entities having a fair value of $167.3 million that were attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Based on our assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

At March 31, 2016, the Company also had $7.2 million of unrealized losses on collateralized loan obligations having a fair value of $158.7 million that were attributable to a combination of factors, including relative changes in interest rates, spreads and interest movements since the time of purchase. Based on our assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

At March 31, 2016, $49.1 million of remaining securities categories had unrealized losses of $0.8 million, but losses have been outstanding for less than twelve months. Management believes that unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not change in credit quality.

As of March 31, 2016, management does not intend to sell securities that are in unrealized loss positions and it is not more likely than not that the Company will be required to sell these securities before recovery of the amortized cost basis. Therefore, management does not consider any investment to be other-than-temporarily impaired at March 31, 2016.

Included in other assets is $16.6 million of Federal Home Loan Bank and Federal Reserve Bank stock sated at par value. At March 31, 2106, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $16.6 million of cost method investment securities.

The Company also holds 11,330 shares of Visa Class B stock, which following resolution of Visa litigation will be converted to Visa Class A shares (the conversion rate was 1.6483 shares of Class A stock for each share of Class B stock) for a total of 18,675 shares of Visa Class A stock with a value of $1.4 million. Our ownership is related to prior ownership in Visa’s network, while Visa operated as a cooperative. This ownership is recorded on our financial records at zero basis.