3. Investments

The amortized cost and estimated fair values of investment securities are summarized as follows:


	December 31, 2016								December 31, 2015
			Gross		Gross						Gross		Gross
	Amortized		unrealized		unrealized		Fair		Amortized		unrealized		unrealized		Fair
(in thousands)	cost		gains		losses		value		cost		gains		losses		value
Available for sale securities (AFS):
Trust preferred securities	$	36,450	$	1,707	$	533	$	37,624	$	44,845	$	1,684	$	446	$	46,083
Corporate debt securities		90,593		1,505		21		92,077		102,273		1,632		169		103,736
Municipal securities		3,265		33		18		3,280		3,787		99		20		3,866
Total AFS	$	130,308	$	3,245	$	572	$	132,981	$	150,905	$	3,415	$	635	$	153,685
Held to maturity securities (HTM):
Mortgage-backed securities	$	319,978	$	186	$	2,531	$	317,633	$	312,658	$	99	$	2,059	$	310,698
Trust preferred securities		10,620		522		267		10,875		10,524		816		85		11,255
Municipal securities		35,443		10		783		34,670		23,484		151		12		23,623
Total HTM	$	366,041	$	718	$	3,581	$	363,178	$	346,666	$	1,066	$	2,156	$	345,576

During the first quarter of 2015, the Company transferred MBS and municipal securities with a book value of $279.8 million and fair value of $288.6 million from AFS to HTM. There were no security transfers between the AFS and HTM categories in 2016. The Company believes the HTM category is more consistent with the Company’s intent for these securities. Transfers of securities from AFS to HTM were made at fair value at the time of transfer. The unamortized portion of the $8.8 million unrealized holding gain at the time of transfer is retained in AOCI and in the carrying value of HTM securities. Accordingly, the balance of HTM securities in the “Amortized cost” column in the table above includes net unamortized unrealized gains of $5.1 million and $6.9 million at December 31, 2016 and 2015, respectively. Such amounts are amortized over the remaining life of the securities.

Proceeds from the sale of investments and the gain (loss) recognized on securities sold or called are summarized as follows:


	For the year ended December 31,
(in thousands)	2016		2015		2014
Proceeds	$	-	$	-	$	11,590
Gains		100		343		1,242
Losses		(6)		(25)		(88)

The amortized cost and estimated fair value of investments in debt securities at December 31, 2016, by contractual maturity are shown below. Expected maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.


	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(in thousands)	cost		value		cost		value
Due in one year or less	$	35,094	$	35,335	$	874	$	872
Due after one year through five years		44,852		45,715		23,497		23,194
Due after five years through ten years		13,912		14,306		2,575		2,564
Due after ten years		36,450		37,625		19,117		18,915
Mortgage-backed securities		-		-		319,978		317,633
	$	130,308	$	132,981	$	366,041	$	363,178

Investment securities with a fair value of $143.6 million and $157.3 million were pledged to secure public deposits of $95.8 million and $113.6 million at December 31, 2016 and 2015, respectively.

Changes in interest rates and market liquidity may cause adverse fluctuations in the market price of securities resulting in temporary unrealized losses. In reviewing the realizable value of its securities in a loss position, the Company considered the following factors: (1) the length of time and extent to which the market had been less than cost; (2) the financial condition and near-term prospects of the issuer; (3) investment downgrades by rating agencies; and (4) whether it is more likely than not that the Company will have to sell the security before a recovery in value. When it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the security, and the fair value of the investment security is less than its amortized cost, an other-than-temporary impairment is recognized in earnings.

For debt securities that are considered other-than temporarily impaired and that the Company does not intend to sell and will not be required to sell prior to recovery of the amortized cost basis, OTTI is recognized. OTTI is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between a security’s amortized cost basis and the discounted present value of expected future cash flows. The amount due to all other factors is recognized in OCI.

There were 165 and 168 securities in the tables below at December 31, 2016 and 2015, respectively, in an unrealized loss position.


	December 31, 2016
	Less than 12 months				12 months or greater				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	value		loss		value		loss		value		loss
AFS
Trust preferred securities	$	14,979	$	526	$	995	$	7	$	15,974	$	533
Corporate debt securities		14,482		21		-		-		14,482		21
Municipal securities		1,214		18		-		-		1,214		18
Total AFS	$	30,675	$	565	$	995	$	7	$	31,670	$	572

HTM
Mortgage-backed securities	$	217,604	$	2,107	$	52,332	$	424	$	269,936	$	2,531
Trust preferred securities		4,175		94		700		173		4,875		267
Municipal securities		30,207		783		-		-		30,207		783
Total HTM	$	251,986	$	2,984	$	53,032	$	597	$	305,018	$	3,581


	December 31, 2015
	Less than 12 months				12 months or greater				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	value		loss		value		loss		value		loss
AFS
Trust preferred securities	$	15,294	$	439	$	995	$	7	$	16,289	$	446
Corporate debt securities		33,591		169		-		-		33,591		169
Municipal securities		431		20		-		-		431		20
Total AFS	$	49,316	$	628	$	995	$	7	$	50,311	$	635

HTM
Mortgage-backed securities	$	281,547	$	2,059	$	-	$	-	$	281,547	$	2,059
Trust preferred securities		-		-		780		85		780		85
Municipal securities		2,604		12		-		-		2,604		12
Total HTM	$	284,151	$	2,071	$	780	$	85	$	284,931	$	2,156

There was no OTTI recognized in earnings during the years ended December 31, 2016, 2015 and 2014.

Other investments at December 31, 2016 and 2015, consist of the following:


	December 31,
(in thousands)	2016		2015
Bank stocks — at cost	$	9,192	$	10,289
Investment in statutory trusts — equity method		2,173		2,172
	$	11,365	$	12,461

Bank stocks consist primarily of stock in the FHLB which is part of the Federal Home Loan Bank System. The purpose of the FHLB investment relates to maintenance of a borrowing base with the FHLB. FHLB stock holdings are largely dependent upon the Company’s liquidity position. To the extent the need for wholesale funding increases or decreases, the Company may purchase additional or sell excess FHLB stock, respectively. The Company evaluates impairment in this investment based on the ultimate recoverability of the par value and at December 31, 2016 and 2015, did not consider the investment to be other-than-temporarily impaired.