NOTE 5.

SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair values of available for sale and held to maturity securities at December 31, 2015 and September 30, 2015 are presented below.

Available For Sale At December 31, 2015	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE


	(Dollars in Thousands)
Debt securities
Trust preferred securities	$	14,932	$	-	$	(2,547	)	$	12,385
Small business administration securities		83,704		1,202		(235	)		84,671
Obligations of states and political subdivisions		-		-		-			-
Non-bank qualified obligations of states and political subdivisions		650,267		13,922		(689	)		663,500
Mortgage-backed securities		586,217		712		(8,572	)		578,357
Total debt securities		1,335,120		15,836		(12,043	)		1,338,913
Common equities and mutual funds		730		308		(10	)		1,028
Total available for sale securities	$	1,335,850	$	16,144	$	(12,053	)	$	1,339,941

At September 30, 2015	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE


	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	16,199	$	8	$	(2,263	)	$	13,944
Small business administration securities		54,493		1,563		-			56,056
Non-bank qualified obligations of states and political subdivisions		603,165		7,240		(1,815	)		608,590
Mortgage-backed securities		580,165		1,283		(4,865	)		576,583
Total debt securities		1,254,022		10,094		(8,943	)		1,255,173
Common equities and mutual funds		639		283		(8	)		914
Total available for sale securities	$	1,254,661	$	10,377	$	(8,951	)	$	1,256,087

Held to Maturity At December 31, 2015	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE


	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	20,699	$	102	$	(102	)	$	20,699
Non-bank qualified obligations of states and political subdivisions		320,260		3,789		(890	)		323,159
Mortgage-backed securities		70,376		-		(1,152	)		69,224
Total held to maturity securities	$	411,335	$	3,891	$	(2,144	)	$	413,082

At September 30, 2015	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE


	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	19,540	$	60	$	(187	)	$	19,413
Non-bank qualified obligations of states and political subdivisions		259,627		2,122		(419	)		261,330
Mortgage-backed securities		66,577		-		(473	)		66,104
Total held to maturity securities	$	345,744	$	2,182	$	(1,079	)	$	346,847

Included in securities available for sale are trust preferred securities as follows:

At December 31, 2015 Issuer⁽¹⁾	Amortized Cost		Fair Value		Unrealized Gain (Loss)			S&P Credit Rating	Moody's Credit Rating
	(Dollars in Thousands)

Key Corp. Capital I	$	4,987	$	4,069	$	(918	)	BB+	Baa2
Huntington Capital Trust II SE		4,979		3,925		(1,054	)	BB	Baa2
PNC Capital Trust		4,966		4,391		(575	)	BBB-	Baa1
Total	$	14,932	$	12,385	$	(2,547	)

(1)	Trust preferred securities are single-issuance. There are no known deferrals, defaults or excess subordination.

At September 30, 2015 Issuer⁽¹⁾	Amortized Cost		Fair Value		Unrealized Gain (Loss)			S&P Credit Rating	Moody's Credit Rating
	(Dollars in Thousands)

Key Corp. Capital I	$	4,986	$	4,189	$	(797	)	BB+	Baa2
Huntington Capital Trust II SE		4,979		4,076		(903	)	BB	Baa2
PNC Capital Trust		4,965		4,402		(563	)	BBB-	Baa1
Total	$	14,930	$	12,667	$	(2,263	)

(1)	Trust preferred securities are single-issuance. There are no known deferrals, defaults or excess subordination.

Management has implemented a process to identify securities with potential credit impairment that are other-than-temporary. This process involves evaluation of the length of time and extent to which the fair value has been less than the amortized cost basis, review of available information regarding the financial position of the issuer, monitoring the rating, watch, and outlook of the security, monitoring changes in value, cash flow projections, and the Company’s intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity. To the extent we determine that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized.

For all securities considered temporarily impaired, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost, which may occur at maturity. The Company believes it will collect all principal and interest due on all investments with amortized cost in excess of fair value and considered only temporarily impaired.

Generally accepted accounting principles require that, at acquisition, an enterprise classify debt securities into one of three categories: Available for sale (“AFS”), Held to Maturity (“HTM”) or trading. AFS securities are carried at fair value on the consolidated statements of financial condition, and unrealized holding gains and losses are excluded from earnings and recognized as a separate component of equity in accumulated other comprehensive income (“AOCI”). HTM debt securities are measured at amortized cost. Both AFS and HTM are subject to review for other-than-temporary impairment. The Company had no trading securities at December 31, 2015 and September 30, 2015.

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2015 and September 30, 2015, are as follows:

Available For Sale	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At December 31, 2015	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Trust preferred securities	$	-	$	-		$	12,385	$	(2,547	)	$	12,385	$	(2,547	)
Small Business Administration securities		28,992		(235	)		-		-			28,992		(235	)
Non-bank qualified obligations of states and political subdivisions		20,924		(203	)		34,033		(486	)		54,957		(689	)
Mortgage-backed securities		498,285		(7,635	)		45,754		(937	)		544,039		(8,572	)
Total debt securities		548,201		(8,073	)		92,172		(3,970	)		640,373		(12,043	)
Common equities and mutual funds		-		-			119		(10	)		119		(10	)
Total available for sale securities	$	548,201	$	(8,073	)	$	92,291	$	(3,980	)	$	640,492	$	(12,053	)

	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At September 30, 2015	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	-	$	-		$	12,667	$	(2,263	)	$	12,667	$	(2,263	)
Non-bank qualified obligations of states and political subdivisions		97,006		(860	)		42,583		(955	)		139,589		(1,815	)
Mortgage-backed securities		448,988		(4,301	)		48,079		(564	)		497,067		(4,865	)
Total debt securities		545,994		(5,161	)		103,329		(3,782	)		649,323		(8,943	)
Common equities and mutual funds		-		-			121		(8	)		121		(8	)
Total available for sale securities	$	545,994	$	(5,161	)	$	103,450	$	(3,790	)	$	649,444	$	(8,951	)

Held To Maturity	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At December 31, 2015	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	3,763	$	(8	)	$	8,560	$	(94	)	$	12,323	$	(102	)
Non-bank qualified obligations of states and political subdivisions		114,703		(811	)		9,679		(79	)		124,382		(890	)
Mortgage-backed securities		11,362		(140	)		57,863		(1,012	)		69,225		(1,152	)
Total held to maturity securities	$	129,828	$	(959	)	$	76,102	$	(1,185	)	$	205,930	$	(2,144	)

	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At September 30, 2015	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	5,528	$	(34	)	$	7,964	$	(153	)	$	13,492	$	(187	)
Non-bank qualified obligations of states and political subdivisions		78,663		(365	)		4,136		(54	)		82,799		(419	)
Mortgage-backed securities		5,509		(43	)		60,595		(430	)		66,104		(473	)
Total held to maturity securities	$	89,700	$	(442	)	$	72,695	$	(637	)	$	162,395	$	(1,079	)

At December 31, 2015, the investment portfolio included securities with current unrealized losses which have existed for longer than one year. All of these securities are considered to be acceptable credit risks. Because the declines in fair value were due to changes in market interest rates, not in estimated cash flows, and the Company does not intend to sell these securities (has not made a decision to sell) and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may occur at maturity, no other-than-temporary impairment was recorded at December 31, 2015.

The amortized cost and fair value of debt securities by contractual maturity are shown below. Certain securities have call features which allow the issuer to call the security prior to maturity. Expected maturities may differ from contractual maturities in mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, mortgage-backed securities are not included in the maturity categories in the following maturity summary. The expected maturities of certain Small Business Administration securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation. However, certain prepayment penalties may apply.

Available For Sale	AMORTIZED COST		FAIR VALUE
At December 31, 2015	(Dollars in Thousands)

Due in one year or less	$	-	$	-
Due after one year through five years		3,202		3,269
Due after five years through ten years		416,377		425,445
Due after ten years		329,324		331,842
		748,903		760,556
Mortgage-backed securities		586,217		578,357
Common equities and mutual funds		730		1,028
Total available for sale securities	$	1,335,850	$	1,339,941

	AMORTIZED COST		FAIR VALUE
At September 30, 2015	(Dollars in Thousands)

Due in one year or less	$	-	$	-
Due after one year through five years		1,174		1,207
Due after five years through ten years		370,087		376,394
Due after ten years		302,596		300,989
		673,857		678,590
Mortgage-backed securities		580,165		576,583
Common equities and mutual funds		639		914
Total available for sale securities	$	1,254,661	$	1,256,087

Held To Maturity	AMORTIZED COST		FAIR VALUE
At December 31, 2015	(Dollars in Thousands)

Due in one year or less	$	225	$	226
Due after one year through five years		9,488		9,475
Due after five years through ten years		143,173		145,014
Due after ten years		188,073		189,143
		340,959		343,858
Mortgage-backed securities		70,376		69,224
Total held to maturity securities	$	411,335	$	413,082

	AMORTIZED COST		FAIR VALUE
At September 30, 2015	(Dollars in Thousands)

Due in one year or less	$	95	$	96
Due after one year through five years		8,411		8,430
Due after five years through ten years		140,145		140,505
Due after ten years		130,516		131,712
		279,167		280,743
Mortgage-backed securities		66,577		66,104
Total held to maturity securities	$	345,744	$	346,847