Securities

6 Months Ended

Jun. 30, 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 and six month periods ended June 30, 2013 and 2012 (in thousands).

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Proceeds from sales	$	-	$	265,992	$	15,751	$	371,103
Gross gains on sales	$	-	$	6,490	$	116	$	7,047
Gross losses on sales		-		-		-		-
Net gains on sales of securities	$	-	$	6,490	$	116	$	7,047
Income tax expense attributable to sales	$	-	$	2,425	$	45	$	2,631

Securities with a carrying value of $1.30 billion, $1.40 billion, and $1.29 billion were pledged to secure public deposits and other secured borrowings at June 30, 2013, December 31, 2012 and June 30, 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 June 30, 2013, December 31, 2012 and June 30, 2012 are as follows (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of June 30, 2013	Cost		Gains		Losses		Value
State and political subdivisions	$	51,757	$	4,332	$	4	$	56,085
Mortgage-backed securities (1)		163,190		7,658		238		170,610
Total	$	214,947	$	11,990	$	242	$	226,695
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 June 30, 2012
State and political subdivisions	$	51,801	$	5,586	$	-	$	57,387
Mortgage-backed securities (1)		230,949		11,635		-		242,584
Total	$	282,750	$	17,221	$	-	$	299,971
(1)     All are residential type mortgage-backed securities

The cost basis, unrealized gains and losses, and fair value of securities available-for-sale at June 30, 2013, December 31, 2012 and June 30, 2012 are presented below (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of June 30, 2013	Cost		Gains		Losses		Value
State and political subdivisions	$	22,369	$	1,112	$	41	$	23,440
Mortgage-backed securities (1)		1,410,189		15,935		13,538		1,412,586
Corporate bonds		260,464		1,585		8,181		253,868
Asset-backed securities		242,690		2,645		491		244,844
Other		2,526		-		-		2,526
Total	$	1,938,238	$	21,277	$	22,251	$	1,937,264
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 June 30, 2012
U.S. Government agencies	$	43,618	$	256	$	-	$	43,874
State and political subdivisions		25,704		1,462		7		27,159
Mortgage-backed securities (1)		1,408,047		25,723		339		1,433,431
Corporate bonds		119,198		-		9,160		110,038
Asset-backed securities		85,090		-		592		84,498
Other		2,583		-		-		2,583
Total	$	1,684,240	$	27,441	$	10,098	$	1,701,583
(1)   All are residential type mortgage-backed securities

The following table summarizes held-to-maturity securities in an unrealized loss position as of June 30, 2013 (thousands).  As of December 31, 2012 and June 30, 2012, there were no held-to-maturity securities in an unrealized loss position.

	Less than 12 Months				12 Months or More				Total
As of June 30, 2013	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
State and political subdivisions	$	374	$	4	$	-	$	-	$	374	$	4
Mortgage-backed securities	$	4,715	$	238	$	-	$	-		4,715		238
Total unrealized loss position	$	5,089	$	242	$	-	$	-	$	5,089	$	242

The following table summarizes available-for-sale securities in an unrealized loss position as of June 30, 2013, December 31, 2012 and June 30, 2012 (in thousands).

	Less than 12 Months				12 Months or More				Total
As of June 30, 2013	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
State and political subdivisions	$	3,645	$	39	$	10	$	2	$	3,655	$	41
Mortgage-backed securities		636,449		13,538		-		-		636,449		13,538
Corporate bonds		97,501		4,635		77,404		3,546		174,905		8,181
Asset-backed securities		56,817		208		32,495		283		89,312		491
Total unrealized loss position	$	794,412	$	18,420	$	109,909	$	3,831	$	904,321	$	22,251
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 June 30, 2012
State and political subdivisions	$	5,696	$	3	$	11	$	4	$	5,707	$	7
Mortgage-backed securities		104,644		332		19,436		7		124,080		339
Corporate bonds		16,500		3,500		93,488		5,660		109,988		9,160
Asset-backed securities		74,097		592		-		-		74,097		592
Total unrealized loss position	$	200,937	$	4,427	$	112,935	$	5,671	$	313,872	$	10,098

At June 30, 2013, there were 111 available-for-sale securities and four 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 June 30, 2013, December 31, 2012 and June 30, 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 or six months ended June 30, 2013 or 2012.

The amortized cost and fair value of held-to-maturity and available-for-sale securities at June 30, 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	$	1,830	$	1,868	$	-	$	-
1 to 5 years		14,572		15,460		10,860		11,724
5 to 10 years		5,119		5,207		25,594		27,728
More than 10 years		848		905		15,303		16,633
		22,369		23,440		51,757		56,085
Corporate bonds:
1 to 5 years		38,183		38,451		-		-
5 to 10 years		211,517		205,234		-		-
More than 10 years		10,764		10,183		-		-
		260,464		253,868		-		-
Asset-backed securities:
1 to 5 years		40,537		40,644		-		-
5 to 10 years		153,281		155,038		-		-
More than 10 years		48,872		49,162		-		-
		242,690		244,844		-		-
Other:
More than 10 years		2,526		2,526		-		-
		2,526		2,526		-		-
Total securities other than mortgage-backed securities:
Within 1 year		1,830		1,868		-		-
1 to 5 years		93,292		94,555		10,860		11,724
5 to 10 years		369,917		365,479		25,594		27,728
More than 10 years		63,010		62,776		15,303		16,633
Mortgage-backed securities		1,410,189		1,412,586		163,190		170,610
	$	1,938,238	$	1,937,264	$	214,947	$	226,695

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.