SECURITIES AVAILABLE FOR SALE

The following is a summary of securities available for sale at December 31, 2013 and 2012:



	At December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In thousands)
Debt securities:
U.S. Government agency and U.S. Government sponsored enterprises
Collateralized mortgage obligations	$	286,608	$	1,104	$	(13,611	)	$	274,101
Mortgage-backed securities	409,165		3,620		(7,789		)	404,996
Trust preferred securities	4,516		—		(819		)	3,697
Municipal bonds	5,687		319		(70		)	5,936
Total debt securities	705,976		5,043		(22,289		)	688,730
Mutual funds	17,425		—		(404		)	17,021
	$	723,401	$	5,043	$	(22,693	)	$	705,751
	At December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In thousands)
Debt securities:
U.S. Government agency and U.S. Government sponsored enterprises
Collateralized mortgage obligations	$	249,373	$	5,649	$	(110	)	$	254,912
Mortgage-backed securities	415,925		10,277		(662		)	425,540
Trust preferred securities	4,502		—		(665		)	3,837
Municipal bonds	4,506		612		—			5,118
Total debt securities	674,306		16,538		(1,437		)	689,407
Mutual funds	14,710		286		—			14,996
	$	689,016	$	16,824	$	(1,437	)	$	704,403

As of December 31, 2013 and December 31, 2012, there were no 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.

The proceeds from sales of securities and the associated gains are listed below:



	2013		2012		2011
	(in thousands)
Proceeds	$	6,634	$	28,446	$	139,458
Gross gains	54		949		1,219
Gross losses	—		—		—

The amortized cost and estimated fair value of debt securities at December 31, 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.



	Amortized Cost		Estimated Fair Value
	(In thousands)
Available for sale:
Due within one year	$	—	$	—
Due after one year through five years	340		350
Due after five years through ten years	3,883		4,170
Due after ten years	5,980		5,113
U.S. Government agency and U.S. Government sponsored enterprises
Collateralized mortgage obligations	286,608		274,101
Mortgage-backed securities	409,165		404,996
Mutual funds	17,425		17,021
	$	723,401	$	705,751

Securities with carrying values of approximately $360.6 million and $338.6 million at December 31, 2013 and December 31, 2012, respectively, were pledged to secure public deposits, various borrowings and for other purposes as required or permitted by law.

Securities with gross unrealized losses, aggregated by investment category and the length of time that the individual securities have been in a continuous unrealized loss position as of the dates indicated, are as follows:



	At December 31, 2013
	Less than 12 months						12 months or longer						Total
Description of Securities	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
	(Dollars in thousands)
Collateralized mortgage obligations*	21	$	198,713	$	(12,460	)	3	$	13,381	$	(1,151	)	24	$	212,094	$	(13,611	)
Mortgage-backed securities*	29	203,276		(7,293		)	7	14,793		(496		)	36	218,069		(7,789		)
Municipal bonds	1	1,112		(70		)	—	—		—			1	1,112		(70		)
Trust preferred securities	—	—		—			1	3,697		(819		)	1	3,697		(819		)
Mutual funds	1	13,021		(404		)	—	—		—			1	13,021		(404		)
	52	$	416,122	$	(20,227	)	11	$	31,871	$	(2,466	)	63	$	447,993	$	(22,693	)

* Investments in U.S. Government agency and U.S. Government sponsored enterprises



	At December 31, 2012
	Less than 12 months						12 months or longer						Total
Description of Securities	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
	(Dollars in thousands)
Collateralized mortgage obligations*	3	$	18,009	$	(110	)	—	$	—	$	—		3	$	18,009	$	(110	)
Mortgage-backed securities*	7	32,406		(597		)	3	8,251		(64		)	10	40,657		(661		)
Trust preferred securities	—	—		—			1	3,837		(665		)	1	3,837		(665		)
Mutual funds	—	—		—			—	—		—			—	—		—
	10	$	50,415	$	(707	)	4	$	12,088	$	(729	)	14	$	62,503	$	(1,436	)

* Investments in U.S. Government agency and U.S. Government sponsored enterprises

The Company evaluates securities for OTTI on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value of the securities has been less than our cost for the securities, and management's intention to sell, or whether it is more likely than not that management will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. In analyzing an issuer’s financial condition, the Company considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

The Company has certain trust preferred securities, collateralized mortgage obligations, and mortgage-backed securities that were in a continuous loss position for twelve months or longer as of December 31, 2013. The trust preferred securities had an amortized cost of $4.5 million and an unrealized loss of $819 thousand at December 31, 2013 and are scheduled to mature in May 2047. These securities were rated investment grade and there were no credit quality concerns with the obligor. The collateralized mortgage obligations and mortgage-backed securities were in an unrealized loss position at December 31, 2013. These securities were investments in U.S. Government agency and U.S. Government sponsored enterprises and have high credit ratings ("AA" grade or better). The interest on the securities that were in an unrealized loss position have been paid as agreed, and management believes this will continue in the future and that the securities will be paid in full as scheduled. The market value decline is deemed to be due to the current market volatility and is not reflective of management’s expectations of the Company's ability to fully recover this investment, which may be at maturity. For these reasons, no OTTI was recognized on the securities that were in a continuous loss position for twelve months or longer at December 31, 2013.

The Company considers the losses on our investments in unrealized loss positions at December 31, 2013 to be temporary based on: 1) the likelihood of recovery; 2) the information relative to the extent and duration of the decline in market value; and 3) the Company’s intention not to sell, and management's determination that it is more likely than not that the Company will not be required to sell a security in an unrealized loss position before recovery of its amortized cost basis.