(3) Securities

The amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at December 31, 2014 and 2013 are as follows (in thousands):


	At December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale:
Investment securities:
U.S. agency obligations	$	19,900	$	—	$	(96	)	$	19,804

Held-to-maturity:
Investment securities:
U.S. agency obligations	$	86,394	$	97	$	(50	)	$	86,441
State and municipal obligations		13,829		25		(8	)		13,846
Corporate debt securities		55,000		—		(9,750	)		45,250

Total investment securities		155,223		122		(9,808	)		145,537

Mortgage-backed securities:
FHLMC		141,494		609		(1,659	)		140,444
FNMA		184,003		4,674		(1,182	)		187,495
GNMA		620		119		—			739

Total mortgage-backed securities		326,117		5,402		(2,841	)		328,678

Total held-to-maturity	$	481,340	$	5,524	$	(12,649	)	$	474,215

Total securities	$	501,240	$	5,524	$	(12,745	)	$	494,019


	At December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale:
Investment securities:
U.S. agency obligations	$	35,128	$	161	$	—		$	35,289
Equity investments		6,757		1,790		—			8,547

Total investment securities available-for-sale	$	41,885	$	1,951	$	—		$	43,836

Held-to-maturity:
Investment securities:
U.S. agency obligations	$	82,406	$	153	$	(144	)	$	82,415
State and municipal obligations		21,784		36		(35	)		21,785
Corporate debt securities		55,000		—		(10,750	)		44,250

Total investment securities		159,190		189		(10,929	)		148,450

Mortgage-backed securities:
FHLMC		148,759		447		(4,552	)		144,654
FNMA		200,070		4,659		(3,607	)		201,122
GNMA		721		135		—			856

Total mortgage-backed securities		349,550		5,241		(8,159	)		346,632

Total held-to-maturity	$	508,740	$	5,430	$	(19,088	)	$	495,082

Total securities	$	550,625	$	7,381	$	(19,088	)	$	538,918

For the year ended December 31, 2013, $536.0 million of previously-designated available-for-sale securities were transferred to a held-to-maturity designation at estimated fair value. The reclassification for the year ended December 31, 2013 is permitted as the Company has appropriately determined the ability and intent to hold these securities as an investment until maturity or call. The securities transferred had an unrealized net loss of $13.3 million at the time of transfer which continues to be reflected in accumulated other comprehensive loss on the consolidated balance sheet, net of subsequent amortization, which is being recognized over the life of the securities. The carrying value of the held-to-maturity investment securities at December 31, 2014 and 2013 are as follows (in thousands):


	December 31,
	2014			2013
Amortized cost	$	481,340		$	508,740
Net loss on date of transfer from available-for-sale		(13,347	)		(13,347	)
Accretion of unrealized loss on securities reclassified to held- to-maturity		1,424			206

Carrying value	$	469,417		$	495,599

Realized gains on the sale of securities were $1,031,000, $46,000 and $226,000 for the years ended December 31, 2014, 2013 and 2012, respectively. There were no realized losses during 2014, 2013 and 2012 on the sale of securities available-for-sale.

The amortized cost and estimated fair value of investment securities at December 31, 2014 by contractual maturity, are shown below (in thousands). Actual maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2014, corporate debt securities with an amortized cost and estimated fair value of $55.0 million and $45.3 million, respectively, were callable prior to the maturity date.


December 31, 2014	Amortized Cost		Estimated Fair Value

Less than one year	$	46,636	$	46,678
Due after one year through five years		72,891		72,815
Due after five years through ten years		596		598
Due after ten years		55,000		45,250

	$	175,123	$	165,341

Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments.

The estimated fair value of securities pledged as required security for deposits and for other purposes required by law amounted to $360,388,000 and $347,238,000 at December 31, 2014 and 2013, respectively. The estimated fair value of securities pledged as collateral for reverse repurchase agreements amounted to $70,954,000 and $78,512,000 at December 31, 2014 and 2013, respectively.

The estimated fair value and unrealized loss for securities available-for-sale and held-to-maturity at December 31, 2014 and December 31, 2013, segregated by the duration of the unrealized loss, are as follows (in thousands):


	At December 31, 2014
	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Available-for-sale:
Investment securities:
U.S. agency obligations	$	19,804	$	(96	)	$	—	$	—		$	19,804	$	(96	)

Held-to-maturity:
Investment securities:
U.S. agency obligations		15,134		(9	)		25,409		(41	)		40,543		(50	)
State and municipal obligations		947		(1	)		1,827		(7	)		2,774		(8	)
Corporate debt securities		—		—			45,250		(9,750	)		45,250		(9,750	)

Total investment securities		16,081		(10	)		72,486		(9,798	)		88,567		(9,808	)

Mortgage-backed securities:
FHLMC		9,155		(34	)		96,975		(1,625	)		106,130		(1,659	)
FNMA		—		—			64,932		(1,182	)		64,932		(1,182	)

Total mortgage-backed securities		9,155		(34	)		161,907		(2,807	)		171,062		(2,841	)

Total held-to-maturity		25,236		(44	)		234,393		(12,605	)		259,629		(12,649	)

Total securities	$	45,040	$	(140	)	$	234,393	$	(12,605	)	$	279,433	$	(12,745	)


	At December 31, 2013
	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Held-to-maturity:
Investment securities:
U.S. agency obligations	$	35,747	$	(144	)	$	—	$	—		$	35,747	$	(144	)
State and municipal obligations		3,526		(31	)		1,153		(4	)		4,679		(35	)
Corporate debt securities		—		—			44,250		(10,750	)		44,250		(10,750	)

Total investment securities		39,273		(175	)		45,403		(10,754	)		84,676		(10,929	)

Mortgage-backed securities:
FHLMC		122,365		(4,552	)		—		—			122,365		(4,552	)
FNMA		84,467		(3,607	)		—		—			84,467		(3,607	)

Total mortgage-backed securities		206,832		(8,159	)		—		—			206,832		(8,159	)

Total held-to-maturity	$	246,105	$	(8,334	)	$	45,403	$	(10,754	)	$	291,508	$	(19,088	)

At December 31, 2014, the amortized cost, estimated fair value and credit rating of the individual corporate debt securities in an unrealized loss position for greater than one year are as follows (in thousands):


Security Description	Amortized Cost		Estimated Fair Value		Credit Rating Moody’s/ S&P

BankAmerica Capital	$	15,000	$	12,000		Ba1/BB
Chase Capital		10,000		8,400		Baa2/BBB-
Wells Fargo Capital		5,000		4,200		A3/BBB+
Huntington Capital		5,000		4,000		Baa3/BB
Keycorp Capital		5,000		4,100		Baa3/BB+
PNC Capital		5,000		4,200		Baa2/BBB-
State Street Capital		5,000		4,250		A3/BBB
SunTrust Capital		5,000		4,100		Baa3/BB+

	$	55,000	$	45,250

At December 31, 2014, the estimated fair value of each corporate debt security was below cost. However, the total estimated fair value of the corporate debt securities has steadily increased over the past several years. The corporate debt securities are issued by other financial institutions with credit ratings ranging from a high of A3 to a low of Ba1 as rated by one of the internationally-recognized credit rating services. These floating-rate securities were purchased in 1998 and have paid coupon interest continuously since issuance. Floating-rate debt securities such as these pay a fixed interest rate spread over 90-day LIBOR. Following the purchase of these securities, the required credit spread increased for these types of securities causing a decline in the market price. The Company concluded that unrealized losses on corporate debt securities were only temporarily impaired at December 31, 2014. In concluding that the impairments were only temporary, the Company considered several factors in its analysis. The Company noted that each issuer made all the contractually due payments when required. There were no defaults on principal or interest payments and no interest payments were deferred. All of the financial institutions were also considered well-capitalized. Credit spreads have now decreased for these types of securities and market prices have improved. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the Company does not have the intent to sell these corporate debt securities and it is more likely than not that the Company will not be required to sell the securities. The Company has held the securities continuously since 1998 and expects to receive its full principal at maturity in 2028 or prior if called by the issuer. Historically, the Company has not utilized security sales as a source of liquidity. The Company’s long range liquidity plans indicate adequate sources of liquidity outside the securities portfolio.

The mortgage-backed securities are issued and guaranteed by either the Federal Home Loan Mortgage Corporation (“FHLMC”) or Federal National Mortgage Association (“FNMA”), corporations which are chartered by the United States government and whose debt obligations are typically rated AA+ by one of the internationally-recognized credit rating services. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive or negative impact on the estimated fair value of the mortgage-backed securities. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that these securities were only temporarily impaired at December 31, 2014.