(4.) INVESTMENT SECURITIES

The amortized cost and fair value of investment securities are summarized below (in thousands):


		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value
March 31, 2015
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	176,648	$	2,324	$	304	$	178,668
Mortgage-backed securities:
Federal National Mortgage Association		187,368		3,067		437		189,998
Federal Home Loan Mortgage Corporation		25,892		769		8		26,653
Government National Mortgage Association		46,584		2,093		-		48,677
Collateralized mortgage obligations:
Federal National Mortgage Association		76,408		969		583		76,794
Federal Home Loan Mortgage Corporation		90,875		233		1,521		89,587
Government National Mortgage Association		26,965		545		12		27,498
Privately issued		-		1,169		-		1,169
Total collateralized mortgage obligations		194,248		2,916		2,116		195,048
Total mortgage-backed securities		454,092		8,845		2,561		460,376
Asset-backed securities		-		231		-		231
Total available for sale securities	$	630,740	$	11,400	$	2,865	$	639,275
Securities held to maturity:
State and political subdivisions		285,630		6,121		28		291,723
Mortgage-backed securities:
Federal National Mortgage Association		3,253		55		-		3,308
Government National Mortgage Association		17,372		125		18		17,479
Total mortgage-backed securities		20,625		180		18		20,787
Total held to maturity securities	$	306,255	$	6,301	$	46	$	312,510


		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value
December 31, 2014
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	160,334	$	1,116	$	975	$	160,475
Mortgage-backed securities:
Federal National Mortgage Association		184,857		2,344		1,264		185,937
Federal Home Loan Mortgage Corporation		29,478		799		7		30,270
Government National Mortgage Association		48,800		2,022		-		50,822
Collateralized mortgage obligations:
Federal National Mortgage Association		76,247		489		944		75,792
Federal Home Loan Mortgage Corporation		89,623		199		2,585		87,237
Government National Mortgage Association		29,954		598		40		30,512
Privately issued		-		1,218		-		1,218
Total collateralized mortgage obligations		195,824		2,504		3,569		194,759
Total mortgage-backed securities		458,959		7,669		4,840		461,788
Asset-backed securities		-		231		-		231
Total available for sale securities	$	619,293	$	9,016	$	5,815	$	622,494
Securities held to maturity:
State and political subdivisions		277,273		4,231		120		281,384
Mortgage-backed securities:
Federal National Mortgage Association		3,279		24		-		3,303
Government National Mortgage Association		13,886		122		-		14,008
Total mortgage-backed securities		17,165		146		-		17,311
Total held to maturity securities	$	294,438	$	4,377	$	120	$	298,695

Investment securities with a total fair value of $849.3 million at March 31, 2015 were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

Sales and calls of securities available for sale were as follows (in thousands):


		Three months ended
		March 31,
		2015		2014
Proceeds from sales	$	29,508	$	19,470
Gross realized gains		1,073		313
Gross realized losses		11		-

The scheduled maturities of securities available for sale and securities held to maturity at March 31, 2015 are shown below (in thousands). Actual expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.


		Amortized		Fair
		Cost		Value
Debt securities available for sale:
Due in one year or less	$	21	$	22
Due from one to five years		153,578		154,145
Due after five years through ten years		244,623		250,793
Due after ten years		232,518		234,315
	$	630,740	$	639,275
Debt securities held to maturity:
Due in one year or less	$	23,341	$	23,408
Due from one to five years		139,825		142,298
Due after five years through ten years		123,914		127,467
Due after ten years		19,175		19,337
	$	306,255	$	312,510

Unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands):


		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
March 31, 2015
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	15,444	$	42	$	25,092	$	262	$	40,536	$	304
Mortgage-backed securities:
Federal National Mortgage Association		23,349		107		34,822		330		58,171		437
Federal Home Loan Mortgage Corporation		1,710		8		-		-		1,710		8
Collateralized mortgage obligations:
Federal National Mortgage Association		4,872		22		21,119		561		25,991		583
Federal Home Loan Mortgage Corporation		8,535		13		65,623		1,508		74,158		1,521
Government National Mortgage Association		-		-		2,431		12		2,431		12
Total collateralized mortgage obligations		13,407		35		89,173		2,081		102,580		2,116
Total mortgage-backed securities		38,466		150		123,995		2,411		162,461		2,561
Total available for sale securities		53,910		192		149,087		2,673		202,997		2,865
Securities held to maturity:
State and political subdivisions		5,484		28		-		-		5,484		28
Mortgage-backed securities:
Government National Mortgage Association		2,186		18		-		-		2,186		18
Total held to maturity securities		7,670		46		-		-		7,670		46
Total temporarily impaired securities	$	61,580	$	238	$	149,087	$	2,673	$	210,667	$	2,911

December 31, 2014
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	34,995	$	77	$	41,070	$	898	$	76,065	$	975
Mortgage-backed securities:
Federal National Mortgage Association		2,242		8		62,592		1,256		64,834		1,264
Federal Home Loan Mortgage Corporation		3,387		7		-		-		3,387		7
Collateralized mortgage obligations:
Federal National Mortgage Association		11,228		24		25,644		920		36,872		944
Federal Home Loan Mortgage Corporation		-		-		76,126		2,585		76,126		2,585
Government National Mortgage Association		-		-		2,510		40		2,510		40
Total collateralized mortgage obligations		11,228		24		104,280		3,545		115,508		3,569
Total mortgage-backed securities		16,857		39		166,872		4,801		183,729		4,840
Total available for sale securities		51,852		116		207,942		5,699		259,794		5,815
Securities held to maturity:
State and political subdivisions		18,036		120		-		-		18,036		120
Total temporarily impaired securities	$	69,888	$	236	$	207,942	$	5,699	$	277,830	$	5,935

The total number of security positions in the investment portfolio in an unrealized loss position at March 31, 2015 was 74 compared to 122 at December 31, 2014. At March 31, 2015, the Company had positions in 33 investment securities with a fair value of $149.1 million and a total unrealized loss of $2.7 million that have been in a continuous unrealized loss position for more than 12 months. There were a total of 41 securities positions in the Company's investment portfolio, with a fair value of $61.6 million and a total unrealized loss of $238 thousand at March 31, 2015, that have been in a continuous unrealized loss position for less than 12 months. At December 31, 2014, the Company had positions in 51 investment securities with a fair value of $207.9 million and a total unrealized loss of $5.7 million that have been in a continuous unrealized loss position for more than 12 months. There were a total of 71 securities positions in the Company's investment portfolio, with a fair value of $69.9 million and a total unrealized loss of $236 thousand at December 31, 2014, that had been in a continuous unrealized loss position for less than 12 months. The unrealized loss on investment securities was predominantly caused by changes in market interest rates subsequent to purchase. The fair value of most of the investment securities in the Company's portfolio fluctuates as market interest rates change.

The Company reviews investment securities on an ongoing basis for the presence of OTTI with formal reviews performed quarterly. When evaluating debt securities for OTTI, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intention to sell the debt security or whether it is more likely than not that it will be required to sell the debt security before its anticipated recovery. The assessment of whether OTTI exists involves a high degree of subjectivity and judgment and is based on the information then available to management. There was no impairment recorded during the three months ended March 31, 2015 and 2014.

Based on management's review and evaluation of the Company's debt securities as of March 31, 2015, the debt securities with unrealized losses were not considered to be OTTI. As of March 31, 2015, the Company did not intend to sell any of the securities in a loss position and believes that it is not likely that it will be required to sell any such securities before the anticipated recovery of amortized cost. Accordingly, as of March 31, 2015, management has concluded that unrealized losses on its investment securities are temporary and no further impairment loss has been realized in the Company's consolidated statements of income.