(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
June 30, 2015
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	271,774	$	777	$	2,474	$	270,077
Mortgage-backed securities:
Federal National Mortgage Association		227,129		1,933		2,307		226,755
Federal Home Loan Mortgage Corporation		28,840		501		204		29,137
Government National Mortgage Association		43,804		1,728		-		45,532
Collateralized mortgage obligations:
Federal National Mortgage Association		83,447		514		1,132		82,829
Federal Home Loan Mortgage Corporation		95,268		186		2,752		92,702
Government National Mortgage Association		23,828		470		39		24,259
Privately issued		-		1,123		-		1,123
Total collateralized mortgage obligations		202,543		2,293		3,923		200,913
Total mortgage-backed securities		502,316		6,455		6,434		502,337
Asset-backed securities		-		225		-		225
Total available for sale securities	$	774,090	$	7,457	$	8,908	$	772,639
Securities held to maturity:
State and political subdivisions		289,713		4,790		451		294,052
Mortgage-backed securities:
Federal National Mortgage Association		9,280		6		86		9,200
Government National Mortgage Association		21,827		5		211		21,621
Total mortgage-backed securities		31,107		11		297		30,821
Total held to maturity securities	$	320,820	$	4,801	$	748	$	324,873


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 $846.9 million at June 30, 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					Six months ended
	June 30,					June 30,
		2015		2014		2015		2014
Proceeds from sales	$	-	$	41,958	$	29,508	$	61,428
Gross realized gains		-		949		1,073		1,262
Gross realized losses		-		-		11		-

The scheduled maturities of securities available for sale and securities held to maturity at June 30, 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	$	30,008	$	30,008
Due from one to five years		166,519		166,266
Due after five years through ten years		328,808		328,993
Due after ten years		248,755		247,372
	$	774,090	$	772,639
Debt securities held to maturity:
Due in one year or less	$	24,064	$	24,158
Due from one to five years		161,041		164,083
Due after five years through ten years		107,099		108,259
Due after ten years		28,616		28,373
	$	320,820	$	324,873

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
June 30, 2015
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	162,940	$	2,110	$	24,637	$	364	$	187,577	$	2,474
Mortgage-backed securities:
Federal National Mortgage Association		93,817		1,779		34,433		528		128,250		2,307
Federal Home Loan Mortgage Corporation		6,005		204		-		-		6,005		204
Collateralized mortgage obligations:
Federal National Mortgage Association		24,181		271		19,886		861		44,067		1,132
Federal Home Loan Mortgage Corporation		21,765		484		61,553		2,268		83,318		2,752
Government National Mortgage Association		-		-		2,306		39		2,306		39
Total collateralized mortgage obligations		45,946		755		83,745		3,168		129,691		3,923
Total mortgage-backed securities		145,768		2,738		118,178		3,696		263,946		6,434
Total available for sale securities		308,708		4,848		142,815		4,060		451,523		8,908
Securities held to maturity:
State and political subdivisions		35,997		451		-		-		35,997		451
Mortgage-backed securities:						-		-
Federal National Mortgage Association		5,724		86		-		-		5,724		86
Government National Mortgage Association		15,328		211		-		-		15,328		211
Total held to maturity securities		57,049		748		-		-		57,049		748
Total temporarily impaired securities	$	365,757	$	5,596	$	142,815	$	4,060	$	508,572	$	9,656

		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
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 June 30, 2015 was 243 compared to 122 at December 31, 2014. At June 30, 2015, the Company had positions in 32 investment securities with a fair value of $142.8 million and a total unrealized loss of $4.1 million that have been in a continuous unrealized loss position for more than 12 months. At June 30, 2015, there were a total of 211 securities positions in the Company's investment portfolio with a fair value of $365.8 million and a total unrealized loss of $5.6 million that had 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. At December 31, 2014, 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 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 six months ended June 30, 2015 and 2014.

Based on management's review and evaluation of the Company's debt securities as of June 30, 2015, the debt securities with unrealized losses were not considered to be OTTI. As of June 30, 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 June 30, 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.