(4)

Securities

All of Bancorp’s securities are available-for-sale. The amortized cost, unrealized gains and losses, and fair value of these securities follow:

(in thousands)	Amortized		Unrealized
December 31, 2016	cost		Gains		Losses		Fair value

U.S. Treasury and other U.S. government obligations	$	74,997	$	1	$	-	$	74,998
Government sponsored enterprise obligations		268,784		800		1,494		268,090
Mortgage-backed securities - government agencies		170,344		735		2,236		168,843
Obligations of states and political subdivisions		57,158		682		396		57,444
Corporate equity securities		653		46		-		699

Total securities available-for-sale	$	571,936	$	2,264	$	4,126	$	570,074

(in thousands)	Amortized		Unrealized
December 31, 2015	cost		Gains		Losses		Fair value

U.S. Treasury and other U.S. government obligations	$	79,999	$	1	$	-	$	80,000
Government sponsored enterprise obligations		251,190		1,468		765		251,893
Mortgage-backed securities - government agencies		170,139		1,143		1,654		169,628
Obligations of states and political subdivisions		62,410		1,342		50		63,702
Corporate equity securities		653		-		-		653

Total securities available-for-sale	$	564,391	$	3,954	$	2,469	$	565,876

Corporate equity securities, included in the available-for-sale portfolio at

December

31,

2016

and

2015,

consisted of common stock in a publicly-traded small business investment company.

2016,

Bancorp sold

securities. In

2015

Bancorp sold securities with total fair market value of

$5.9

million, generating

gain or loss. These securities consisted of agency and mortgage-backed securities with small remaining balances. In

2014,

Bancorp sold securities with total fair market value of

$7.7

million, generating a net loss of

thousand. These securities consisted of mortgage-backed securities with small remaining balances, obligations of state and political subdivisions, and agency securities. Sales were made in the ordinary course of portfolio management. Management has the intent and ability to hold all remaining investment securities available-for-sale for the foreseeable future.

A summary of the securities available-for-sale by maturity as of

December

31,

2016

is shown below.

(in thousands)
Securities available-for-sale	Amortized cost		Fair value

Due within 1 year	$	176,860	$	177,024
Due after 1 but within 5 years		99,551		99,637
Due after 5 but within 10 years		17,129		16,881
Due after 10 years		107,399		106,990
Corporate equity security		653		699
Mortgage-backed securities - government agencies		170,344		168,843

Total securities available for sale	$	571,936	$	570,074

Actual maturities

may

differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call or prepayment penalties. The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as the FHLMC, FNMA, and GNMA. These securities differ from traditional debt securities primarily in that they

may

have uncertain principal payment dates and are priced based on estimated prepayment rates on the underlying collateral.

Securities with a carrying value of

$380.4

million and

$380.7

million were pledged at

December

31,

2016

and

2015,

respectively, to secure accounts of commercial depositors in cash management accounts, public deposits, and cash balances for certain wealth management and trust accounts.

December

31,

2016

and

2015,

there were

holdings of securities of any

one

issuer, other than the U.S. Government and its agencies, in an amount greater than

10%

of stockholders’ equity.

Securities with unrealized losses not recognized in the statements of income are as follows:

(in thousands)	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2016	value		losses		value		losses		value		losses

Government sponsored enterprise obligations	$	154,951	$	1,344	$	3,485	$	150	$	158,436	$	1,494
Mortgage-backed securities - government agencies		115,374		1,873		9,914		363		125,288		2,236
Obligations of states and political subdivisions		29,893		380		1,478		16		31,371		396

Total temporarily impaired securities	$	300,218	$	3,597	$	14,877	$	529	$	315,095	$	4,126

December 31, 2015
Government sponsored enterprise obligations	$	102,098	$	500	$	8,469	$	265	$	110,567	$	765
Mortgage-backed securities - government agencies		49,774		662		29,936		992		79,710		1,654
Obligations of states and political subdivisions		13,225		31		1,955		19		15,180		50

Total temporarily impaired securities	$	165,097	$	1,193	$	40,360	$	1,276	$	205,457	$	2,469

The applicable dates for determining when securities are in an unrealized loss position are

December

31,

2016

and

2015.

As such, it is possible that a security had a market value lower than its amortized cost on other days during the past

twelve

months, but is not in the “Investments with an unrealized loss of less than

months” category above.

December

31,

2015,

Bancorp recorded an other-than-temporary impairment charge of

$103,000,

in other non-interest expense, on the corporate equity security. This security, the only equity security in available-for-sale securities, exhibited characteristics which indicated the fair value was not likely to recover to a level equal to its carrying value within a reasonable period of time. At

December

31,

2016

the fair value of this security exceeded its amortized cost, resulting in an unrealized gain of

$46,000.

Unrealized losses on Bancorp’s remaining investment securities portfolio have not been recognized as expense because the securities are of high credit quality, and the decline in fair values is largely due to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach their maturity date and/or the interest rate environment returns to conditions similar to when these securities were purchased. These investments consist of

117

and

separate investment positions as of

December

31,

2016

and

2015,

respectively. Because management does not intend to sell the investments, and it is not likely that Bancorp will be required to sell the investments before recovery of their amortized cost bases, which

may

be maturity, Bancorp does

not

consider these securities to be other-than-temporarily impaired at

December

31,

2016.

FHLB stock and other securities are investments held by Bancorp which are not readily marketable and are carried at cost. This category consists of holdings of Federal Home Loan Bank of Cincinnati (“FHLB”) stock which are required for access to FHLB borrowing, and are classified as restricted securities.