Securities

3 Months Ended

Mar. 31, 2013

Investment Securities [Abstract]

Securities

Note 4 – Securities

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three month periods ended March 31, 2013 and 2012 (in thousands).

	Three Months Ended
	March 31,
	2013		2012
Proceeds from sales	$	15,751	$	105,111
Gross gains on sales	$	116	$	557
Gross losses on sales		—		—
Net gains on sales of securities	$	116	$	557
Income tax expense attributable to sales	$	45	$	217

Securities with a carrying value of $1.25 billion, $1.40 billion, and $1.38 billion were pledged to secure public deposits and other secured borrowings at March 31, 2013, December 31, 2012 and March 31, 2012, respectively.  Substantial borrowing capacity remains available under borrowing arrangements with the FHLB with currently pledged securities.

Securities are classified as held-to-maturity when management has the positive intent and ability to hold them until maturity.  Securities held-to-maturity are carried at amortized cost.

The amortized cost, gross unrealized gains and losses and fair value of securities held-to-maturity at March 31, 2013, December 31, 2012 and March 31, 2012 are as follows (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of March 31, 2013	Cost		Gains		Losses		Value
State and political subdivisions	$	51,768	$	5,663	$	—	$	57,431
Mortgage-backed securities (1)		179,319		10,388		51		189,656
Total	$	231,087	$	16,051	$	51	$	247,087
As of December 31, 2012
State and political subdivisions	$	51,780	$	5,486	$	—	$	57,266
Mortgage-backed securities (1)		192,404		11,461		—		203,865
Total	$	244,184	$	16,947	$	—	$	261,131
As of March 31, 2012
State and political subdivisions	$	51,893	$	4,413	$	—	$	56,306
Mortgage-backed securities (1)		251,743		10,441		—		262,184
Total	$	303,636	$	14,854	$	—	$	318,490
(1)All are residential type mortgage-backed securities

The cost basis, unrealized gains and losses, and fair value of securities available-for-sale at March 31, 2013, December 31, 2012 and March 31, 2012 are presented below (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of March 31, 2013	Cost		Gains		Losses		Value
State and political subdivisions	$	22,711	$	1,330	$	4	$	24,037
Mortgage-backed securities (1)		1,450,645		21,210		3,544		1,468,311
Corporate bonds		190,843		2,035		4,084		188,794
Asset-backed securities		223,827		2,420		377		225,870
Other		2,414		—		—		2,414
Total	$	1,890,440	$	26,995	$	8,009	$	1,909,426
As of December 31, 2012
State and political subdivisions	$	27,717	$	1,354	$	19	$	29,052
Mortgage-backed securities (1)		1,408,042		22,552		2,092		1,428,502
Corporate bonds		169,783		1,052		7,173		163,662
Asset-backed securities		209,411		1,894		749		210,556
Other		2,821		—		—		2,821
Total	$	1,817,774	$	26,852	$	10,033	$	1,834,593
As of March 31, 2012
U.S. Government agencies	$	43,593	$	286	$	90	$	43,789
State and political subdivisions		21,490		1,321		3		22,808
Mortgage-backed securities (1)		1,692,446		33,212		590		1,725,068
Corporate bonds		119,154		—		14,568		104,586
Other		2,564		—		—		2,564
Total	$	1,879,247	$	34,819	$	15,251	$	1,898,815
(1)      All are residential type mortgage-backed securities

The following table summarizes held-to-maturity securities in an unrealized loss position as of March 31, 2013 (thousands).  As of December 31, 2012 and March 31, 2012, there were no held-to-maturity securities in an unrealized loss position.

	Less than 12 Months				12 Months or More				Total
			Unrealized				Unrealized				Unrealized
As of March 31, 2013	Fair Value		Loss		Fair Value		Loss		Fair Value		Loss
Mortgage-backed securities	$	4,929	$	51	$	—	$	—		4,929		51
Total unrealized loss position	$	4,929	$	51	$	—	$	—	$	4,929	$	51

The following table summarizes available-for-sale securities in an unrealized loss position as of March 31, 2013, December 31, 2012 and March 31, 2012 (in thousands).

	Less than 12 Months				12 Months or More				Total
			Unrealized				Unrealized				Unrealized
As of March 31, 2013	Fair Value		Loss		Fair Value		Loss		Fair Value		Loss
State and political subdivisions	$	1,185	$	2	$	10	$	2	$	1,195	$	4
Mortgage-backed securities		399,263		3,544		—		—		399,263		3,544
Corporate bonds		21,323		145		77,007		3,939		98,330		4,084
Asset-backed securities		72,064		377		—		—		72,064		377
Total unrealized loss position	$	493,835	$	4,068	$	77,017	$	3,941	$	570,852	$	8,009
As of December 31, 2012
State and political subdivisions	$	3,674	$	17	$	10	$	2	$	3,684	$	19
Mortgage-backed securities		326,485		2,092		—		—		326,485		2,092
Corporate bonds		21,248		136		93,903		7,037		115,151		7,173
Asset-backed securities		82,188		749		—		—		82,188		749
Total unrealized loss position	$	433,595	$	2,994	$	93,913	$	7,039	$	527,508	$	10,033
As of March 31, 2012
U.S. Government agencies	$	9,905	$	90	$	—	$	—	$	9,905	$	90
State and political subdivisions		—		—		11		3		11		3
Mortgage-backed securities		405,039		574		21,067		16		426,106		590
Corporate bonds		35,306		2,872		69,230		11,696		104,536		14,568
Total unrealized loss position	$	450,250	$	3,536	$	90,308	$	11,715	$	540,558	$	15,251

At March 31, 2013, there were 68 available-for-sale securities and three 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 March 31, 2013, December 31, 2012 and March 31, 2012 were primarily attributable to changes in interest rates, however the unrealized losses in corporate bonds also reflect downgrades in the underlying securities ratings since the time of acquisition.  The bonds remain above investment grade and United does not consider them to be impaired.

Management evaluates securities for other-than-temporary impairment at least 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 months ended March 31, 2013 or 2012.

The amortized cost and fair value of held-to-maturity and available-for-sale securities at March 31, 2013, 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
State and political subdivisions:
Within 1 year	$	996	$	1,005	$	—	$	—
1 to 5 years		14,552		15,453		9,858		10,672
5 to 10 years		6,316		6,658		26,481		29,490
More than 10 years		847		921		15,429		17,269
		22,711		24,037		51,768		57,431
Corporate bonds:
1 to 5 years		38,123		38,503		—		—
5 to 10 years		141,961		140,119		—		—
More than 10 years		10,759		10,172		—		—
		190,843		188,794		—		—
Asset-backed securities:
1 to 5 years		32,384		32,405		—		—
5 to 10 years		142,507		143,693		—		—
More than 10 years		48,936		49,772		—		—
		223,827		225,870		—		—
Other:
More than 10 years		2,414		2,414		—		—
		2,414		2,414		—		—
Total securities other than mortgage-backed securities:
Within 1 year		996		1,005		—		—
1 to 5 years		85,059		86,361		9,858		10,672
5 to 10 years		290,784		290,470		26,481		29,490
More than 10 years		62,956		63,279		15,429		17,269
Mortgage-backed securities		1,450,645		1,468,311		179,319		189,656
	$	1,890,440	$	1,909,426	$	231,087	$	247,087

Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.