Securities

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Securities

4. Securities

Available-for-Sale Securities

The following table summarizes available-for-sale securities held by the Company at March 31, 2016:

		Available-for-Sale Securities
March 31, 2016		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	523,478	$	12,417	$	2	$	535,893
Obligations of U.S. states and political subdivisions		85,443		1,136		58		86,521
Mortgage-backed securities – residential, issued by
U.S. Government agencies		136,417		1,690		518		137,589
U.S. Government sponsored entities		666,575		4,902		3,022		668,455
Non-U.S. Government agencies or sponsored entities		144		1		0		145
U.S. corporate debt securities		2,500		0		338		2,162
Total debt securities		1,414,557		20,146		3,938		1,430,765
Equity securities		1,000		0		56		944
Total available-for-sale securities	$	1,415,557	$	20,146	$	3,994	$	1,431,709

 The following table summarizes available-for-sale securities held by the Company at December 31, 2015:

		Available-for-Sale Securities
December 31, 2015		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	551,176	$	3,512	$	1,795	$	552,893
Obligations of U.S. states and political subdivisions		83,981		898		153		84,726
Mortgage-backed securities – residential, issued by
U.S. Government agencies		94,459		1,535		1,316		94,678
U.S. Government sponsored entities		656,947		3,599		10,449		650,097
Non-U.S. Government agencies or sponsored entities		192		2		0		194
U.S. corporate debt securities		2,500		0		338		2,162
Total debt securities		1,389,255		9,546		14,051		1,384,750
Equity securities		1,000		0		66		934
Total available-for-sale securities	$	1,390,255	$	9,546	$	14,117	$	1,385,684

Held-to-Maturity Securities

The following table summarizes held-to-maturity securities held by the Company at March 31, 2016:

		Held-to-Maturity Securities
March 31, 2016		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	132,387	$	4,723	$	0	$	137,110
Obligations of U.S. states and political subdivisions	$	12,623	$	409	$	3	$	13,029
Total held-to-maturity debt securities	$	145,010	$	5,132	$	3	$	150,139

The following table summarizes held-to-maturity securities held by the Company at December 31, 2015:

		Held-to-Maturity Securities
December 31, 2015		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	132,482	$	649	$	444	$	132,687
Obligations of U.S. states and political subdivisions		13,589		414		4		13,999
Total held-to-maturity debt securities	$	146,071	$	1,063	$	448	$	146,686

The Company may from time to time sell investment securities from its available-for-sale portfolio. Realized gains on sales, including called securities, of available-for-sale securities were $232,000 and $290,000 for the three month periods ending March 21, 2016 and 2015, respectively. The sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management.

The following table summarizes available-for-sale securities that had unrealized losses at March 31, 2016:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	700	$	1	$	698	$	1	$	1,398	$	2
Obligations of U.S. states and political subdivisions		9,280		35		6,382		23		15,662		58
Mortgage-backed securities – issued by
U.S. Government agencies		31,122		77		26,216		441		57,338		518
U.S. Government sponsored entities		140,571		391		212,062		2,631		352,633		3,022
U.S. corporate debt securities		0		0		2,163		338		2,163		338
Equity securities		0		0		944		56		944		56
Total available-for-sale securities	$	181,673	$	504	$	248,465	$	3,490	$	430,138	$	3,994

The following table summarizes held-to-maturity securities that had unrealized losses at March 31, 2016.

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	802	$	3	$	0	$	0	$	802	$	3
Total held-to-maturity securities	$	802	$	3	$	0	$	0	$	802	$	3

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2015:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	183,697	$	1,618	$	5,844	$	177	$	189,541	$	1,795
Obligations of U.S. states and political subdivisions		25,402		141		3,408		12		28,810		153
Mortgage-backed securities – residential, issued by
U.S. Government agencies		32,636		350		30,244		966		62,880		1,316
U.S. Government sponsored entities		364,420		4,102		176,325		6,347		540,745		10,449
U.S. corporate debt securities		0		0		2,163		338		2,163		338
Equity securities		0		0		934		66		934		66
Total available-for-sale securities	$	606,155	$	6,211	$	218,918	$	7,906	$	825,073	$	14,117

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2015.

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	29,671	$	444	$	0	$	0	$	29,671	$	444
Obligations of U.S. sponsored entities	$	1,966	$	4	$	0	$	0	$	1,966	$	4
Total held-to-maturity securities	$	31,637	$	448	$	0	$	0	$	31,637	$	448

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and U.S. government agencies such as Government National Mortgage Association. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

The Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity. Accordingly, as of March 31, 2016, and December 31, 2015, management determined that the unrealized losses detailed in the tables above are not other-than-temporary.

Ongoing Assessment of Other-Than-Temporary Impairment

On a quarterly basis, the Company performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered other-than-temporary impairment (“OTTI”). A debt security is considered impaired if the fair value is less than its amortized cost basis (including any previous OTTI charges) at the reporting date. If impaired, the Company then assesses whether the unrealized loss is other-than-temporary. An unrealized loss on a debt security is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value, discounted at the security’s effective rate, of the expected future cash flows is less than the amortized cost basis of the debt security. As a result, the credit loss component of an other-than-temporary impairment write-down for debt securities is recorded in earnings while the remaining portion of the impairment loss is recognized, net of tax, in other comprehensive income provided that the Company does not intend to sell the underlying debt security and it is more-likely-than not that the Company would not have to sell the debt security prior to recovery of the unrealized loss, which may be to maturity. If the Company intended to sell any securities with an unrealized loss or it is more-likely-than not that the Company would be required to sell the investment securities, before recovery of their amortized cost basis, then the entire unrealized loss would be recorded in earnings.

The Company considers the following factors in determining whether a credit loss exists.

- The length of time and the extent to which the fair value has been less than the amortized cost basis;

- The level of credit enhancement provided by the structure which includes, but is not limited to, credit subordination positions, excess spreads, overcollateralization, protective triggers;

- Changes in the near term prospects of the issuer or underlying collateral of a security, such as changes in default rates, loss severities given default and significant changes in prepayment assumptions;

- The level of excess cash flow generated from the underlying collateral supporting the principal and interest payments of the debt securities; and

- Any adverse change to the credit conditions of the issuer or the security such as credit downgrades by the rating agencies.

As a result of the other-than-temporarily impairment review process, the Company does not consider any investment security held at March 31, 2016 to be other-than-temporarily impaired.

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

March 31, 2016
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	33,020	$	33,573
Due after one year through five years		338,449		345,970
Due after five years through ten years		227,723		233,085
Due after ten years		12,229		11,948
Total		611,421		624,576
Mortgage-backed securities		803,136		806,189
Total available-for-sale debt securities	$	1,414,557	$	1,430,765

December 31, 2015
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	53,936	$	54,735
Due after one year through five years		351,462		353,736
Due after five years through ten years		219,161		218,561
Due after ten years		13,098		12,749
Total		637,657		639,781
Mortgage-backed securities		751,598		744,969
Total available-for-sale debt securities	$	1,389,255	$	1,384,750

March 31, 2016
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	8,430	$	8,478
Due after one year through five years		13,893		14,422
Due after five years through ten years		122,519		127,041
Due after ten years		168		198
Total held-to-maturity debt securities	$	145,010	$	150,139

December 31, 2015
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	9,249	$	9,294
Due after one year through five years		14,069		14,341
Due after five years through ten years		122,585		122,853
Due after ten years		168		198
Total held-to-maturity debt securities	$	146,071	$	146,686

The Company also holds non-marketable Federal Home Loan Bank New York (“FHLBNY”) stock, non-marketable Federal Home Loan Bank Pittsburgh (“FHLBPITT”) stock and non-marketable Atlantic Community Bankers Bank (“ACBB”) stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock, FHLBPITT stock, and ACBB stock totaled $13.9 million, $11.7 million and $95,000 at March 31, 2016, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. As such, the Company has not recognized any impairment on its holdings of FHLBNY and FHLBPITT stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of March 31, 2016, we have determined that no impairment write-downs are currently required.

Trading Securities
The following summarizes trading securities, at estimated fair value, as of:
(in thousands)	03/31/2016		12/31/2015
Obligations of U.S. Government sponsored entities	$	6,421	$	6,601
Mortgage-backed securities – residential, issued by U.S. Government sponsored entities		602		767
Total	$	7,023	$	7,368

The decrease in the trading portfolio reflects maturities or payments during the three months ended March 31, 2016. For the three months ended March 31, 2016, net mark-to-market losses related to the securities trading portfolio were $46,000 compared to net mark-to-market losses of $63,000 for the three months ended March 31, 2015.

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. Securities carried of $1.3 billion and $1.2 billion at March 31, 2016, and December 31, 2015, respectively, were either pledged or sold under agreements to repurchase.