(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, 2016
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	235,964	$	5,506	$	7	$	241,463
Mortgage-backed securities:
Federal National Mortgage Association		293,220		4,312		53		297,479
Federal Home Loan Mortgage Corporation		28,019		535		28		28,526
Government National Mortgage Association		18,302		664		12		18,954
Collateralized mortgage obligations:
Federal National Mortgage Association		16,986		394		-		17,380
Federal Home Loan Mortgage Corporation		5,165		90		-		5,255
Privately issued		-		777		-		777
Total mortgage-backed securities		361,692		6,772		93		368,371
Asset-backed securities		-		179		-		179
Total available for sale securities	$	597,656	$	12,457	$	100	$	610,013
Securities held to maturity:
State and political subdivisions		291,934		8,544		1		300,477
Mortgage-backed securities:
Federal National Mortgage Association		9,190		152		2		9,340
Government National Mortgage Association		26,365		204		41		26,528
Collateralized mortgage obligations:
Federal National Mortgage Association		54,281		227		15		54,493
Federal Home Loan Mortgage Corporation		77,407		467		5		77,869
Government National Mortgage Association		17,106		57		7		17,156
Total mortgage-backed securities		184,349		1,107		70		185,386
Total held to maturity securities	$	476,283	$	9,651	$	71	$	485,863


December 31, 2015
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	260,748	$	1,164	$	1,049	$	260,863
Mortgage-backed securities:
Federal National Mortgage Association		209,671		1,092		2,333		208,430
Federal Home Loan Mortgage Corporation		24,564		282		194		24,652
Government National Mortgage Association		26,465		943		4		27,404
Collateralized mortgage obligations:
Federal National Mortgage Association		16,998		90		154		16,934
Federal Home Loan Mortgage Corporation		5,175		1		91		5,085
Privately issued		-		809		-		809
Total mortgage-backed securities		282,873		3,217		2,776		283,314
Asset-backed securities		-		218		-		218
Total available for sale securities	$	543,621	$	4,599	$	3,825	$	544,395
Securities held to maturity:
State and political subdivisions		294,423		6,562		4		300,981
Mortgage-backed securities:
Federal National Mortgage Association		9,242		14		79		9,177
Government National Mortgage Association		25,607		33		159		25,481
Collateralized mortgage obligations:
Federal National Mortgage Association		56,791		-		818		55,973
Federal Home Loan Mortgage Corporation		80,570		-		1,120		79,450
Government National Mortgage Association		19,084		19		101		19,002
Total mortgage-backed securities		191,294		66		2,277		189,083
Total held to maturity securities	$	485,717	$	6,628	$	2,281	$	490,064

Investment securities with a total fair value of $908.8 million at March 31, 2016 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,
		2016		2015
Proceeds from sales	$	17,627	$	29,508
Gross realized gains		613		1,073
Gross realized losses		-		11

The scheduled maturities of securities available for sale and securities held to maturity at March 31, 2016 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	$	5,101	$	5,137
Due from one to five years		179,535		182,050
Due after five years through ten years		300,883		308,638
Due after ten years		112,137		114,188
	$	597,656	$	610,013
Debt securities held to maturity:
Due in one year or less	$	20,934	$	20,987
Due from one to five years		174,277		178,726
Due after five years through ten years		111,349		115,419
Due after ten years		169,723		170,731
	$	476,283	$	485,863

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, 2016
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	391	$	1	$	7,482	$	6	$	7,873	$	7
Mortgage-backed securities:
Federal National Mortgage Association		12,098		3		15,781		50		27,879		53
Federal Home Loan Mortgage Corporation		-		-		4,258		28		4,258		28
Government National Mortgage Association		1,332		12		-		-		1,332		12
Total mortgage-backed securities		13,430		15		20,039		78		33,469		93
Total available for sale securities		13,821		16		27,521		84		41,342		100
Securities held to maturity:
State and political subdivisions		2,477		1		-		-		2,477		1
Mortgage-backed securities:
Federal National Mortgage Association		1,362		2		-		-		1,362		2
Government National Mortgage Association		4,225		12		3,773		29		7,998		41
Collateralized mortgage obligations:
Federal National Mortgage Association		6,895		15		-		-		6,895		15
Federal Home Loan Mortgage Corporation		5,100		5		-		-		5,100		5
Government National Mortgage Association		3,366		7		-		-		3,366		7
Total mortgage-backed securities		20,948		41		3,773		29		24,721		70
Total held to maturity securities		23,425		42		3,773		29		27,198		71
Total temporarily impaired securities	$	37,246	$	58	$	31,294	$	113	$	68,540	$	171

December 31, 2015
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	82,298	$	735	$	26,302	$	314	$	108,600	$	1,049
Mortgage-backed securities:
Federal National Mortgage Association		123,774		2,134		9,562		199		133,336		2,333
Federal Home Loan Mortgage Corporation		12,660		194		-		-		12,660		194
Government National Mortgage Association		1,405		4		-		-		1,405		4
Collateralized mortgage obligations:
Federal National Mortgage Association		7,778		154		-		-		7,778		154
Federal Home Loan Mortgage Corporation		4,998		91		-		-		4,998		91
Total mortgage-backed securities		150,615		2,577		9,562		199		160,177		2,776
Total available for sale securities		232,913		3,312		35,864		513		268,777		3,825
Securities held to maturity:
State and political subdivisions		3,075		4		-		-		3,075		4
Mortgage-backed securities:
Federal National Mortgage Association		5,666		79		-		-		5,666		79
Government National Mortgage Association		8,790		159		-		-		8,790		159
Collateralized mortgage obligations:
Federal National Mortgage Association		55,973		818		-		-		55,973		818
Federal Home Loan Mortgage Corporation		79,323		1,120		-		-		79,323		1,120
Government National Mortgage Association		14,559		101		-		-		14,559		101
Total mortgage-backed securities		164,311		2,277		-		-		164,311		2,277
Total held to maturity securities		167,386		2,281		-		-		167,386		2,281
Total temporarily impaired securities	$	400,299	$	5,593	$	35,864	$	513	$	436,163	$	6,106

The total number of security positions in the investment portfolio in an unrealized loss position at March 31, 2016 was 45 compared to 152 at December 31, 2015. At March 31, 2016, the Company had positions in 13 investment securities with a fair value of $31.3 million and a total unrealized loss of $113 thousand that have been in a continuous unrealized loss position for more than 12 months. At March 31, 2016, there were a total of 32 securities positions in the Company's investment portfolio with a fair value of $37.2 million and a total unrealized loss of $58 thousand that had been in a continuous unrealized loss position for less than 12 months. At December 31, 2015, the Company had positions in 10 investment securities with a fair value of $35.9 million and a total unrealized loss of $513 thousand that had been in a continuous unrealized loss position for more than 12 months. At December 31, 2015, there were a total of 142 securities positions in the Company's investment portfolio with a fair value of $400.3 million and a total unrealized loss of $5.6 million 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 other than temporary impairment ("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, 2016 and 2015.

Based on management's review and evaluation of the Company's debt securities as of March 31, 2016, the debt securities with unrealized losses were not considered to be other-than-temporarily impaired. As of March 31, 2016, 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, 2016, 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.