Securities Available for Sale

Securities available for sale at December 31, 2015 and 2014 are summarized as follows (in thousands):



	2015
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
U.S. Treasury obligations	$	8,006	—	(2	)	8,004
Agency obligations	82,396		82	(148	)	82,330
Mortgage-backed securities	857,430		9,828	(3,397	)	863,861
State and municipal obligations	4,193		115	—		4,308
Corporate obligations	5,516		6	(10	)	5,512
Equity securities	397		122	—		519
	$	957,938	10,153	(3,557	)	964,534



	2014
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
U.S. Treasury obligations	$	8,016	3	(3	)	8,016
Agency obligations	94,871		268	(63	)	95,076
Mortgage-backed securities	944,796		15,610	(3,149	)	957,257
State and municipal obligations	6,855		147	—		7,002
Corporate obligations	6,526		9	(15	)	6,520
Equity securities	397		127	—		524
	$	1,061,461	16,164	(3,230	)	1,074,395

Securities available for sale having a carrying value of $614,824,000 and $585,928,000 at December 31, 2015 and 2014, respectively, are pledged to secure other borrowings and securities sold under repurchase agreements.

The amortized cost and fair value of securities available for sale at December 31, 2015, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.



	2015
	Amortized cost		Fair value
Due in one year or less	$	27,044	27,058
Due after one year through five years	67,106		67,037
Due after five years through ten years	3,681		3,701
Due after ten years	2,280		2,358
	$	100,111	100,154

Mortgage-backed securities totaling $857.4 million at amortized cost and $863.9 million at fair value are excluded from the table above as their expected lives are expected to be shorter than the contractual maturity date due to principal prepayments. Also excluded from the table above are equity securities of $397,000 at amortized cost and $519,000 at fair value.

During 2015, proceeds from the sale of securities available for sale were $14,005,000, resulting in gross gains of $643,000 and no gross losses. Also, for the year ended December 31, 2015, proceeds from calls on securities available for sale totaled $1,110,000, with gross gains of $3,000 and no gross losses recognized.

For the 2014 period, proceeds from the sale of securities available for sale were $24,509,000 resulting in gross gains of $632,000 and gross losses of 404,000 losses. Also, for the year ended December 31, 2014, proceeds from calls on securities available for sale totaled $740,000, with gross gains of $2,000 and no gross losses recognized.

The Company estimates the loss projections for each non-agency mortgage-backed security by stressing the individual loans collateralizing the security and applying a range of expected default rates, loss severities, and prepayment speeds in conjunction with the underlying credit enhancement for each security. Based on specific assumptions about collateral and vintage, a range of possible cash flows was identified to determine whether other-than-temporary impairment existed during the year ended December 31, 2015.

The following table presents a roll-forward of the credit loss component of other-than-temporary impairment (“OTTI”) on debt securities for which a non-credit component of OTTI was recognized in other comprehensive income. OTTI recognized in earnings after that date for credit-impaired debt securities is presented as an addition in two components, based upon whether the current period is the first time a debt security was credit-impaired (initial credit impairment) or is not the first time a debt security was credit impaired (subsequent credit impairment). Changes in the credit loss component of credit-impaired debt securities were as follows (in thousands):



	December 31,
	2015		2014	2013
Beginning credit loss amount	$	—	1,674	1,240
Add: Initial OTTI credit losses	—		—	—
Subsequent OTTI credit losses	—		—	434
Less: Realized losses for securities sold	—		1,674	—
Securities intended or required to be sold	—		—	—
Increases in expected cash flows on debt securities	—		—	—
Ending credit loss amount	$	—	—	1,674

For the years ended December 31, 2015 and 2014, the Company did not incur a net other-than-temporary impairment charge on securities available for sale. In 2014, the Company realized a $59,000 gain and a $365,000 loss on the sale of previously impaired non-Agency mortgage-backed securities, respectively. The Company previously incurred cumulative credit losses of $1.7 million on these securities. Prior to these charges, any impairment was considered temporary and was recorded as an unrealized loss on securities available for sale and reflected as a reduction of equity, net of tax, through accumulated other comprehensive income.

The following table represents the Company’s disclosure on securities available for sale with temporary impairment (in thousands):



	December 31, 2015 Unrealized Losses
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses		Fair value	Gross unrealized losses		Fair value	Gross unrealized losses
U.S. Treasury obligations	$	8,004	(2	)	—	—		8,004	(2	)
Agency obligations	59,197		(148	)	—	—		59,197	(148	)
Mortgage-backed securities	327,263		(2,427	)	47,911	(970	)	375,174	(3,397	)
Corporate obligations	500		—		992	(10	)	1,492	(10	)
	$	394,964	(2,577	)	48,903	(980	)	443,867	(3,557	)



	December 31, 2014 Unrealized Losses
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses		Fair value	Gross unrealized losses		Fair value	Gross unrealized losses
U.S Treasury obligations	$	5,937	(3	)	—	—		5,937	(3	)
Agency obligations	24,404		(40	)	5,010	(23	)	29,414	(63	)
Mortgage-backed securities	55,488		(221	)	206,669	(2,928	)	262,157	(3,149	)
Corporate obligations	3,466		(15	)	—	—		3,466	(15	)
	$	89,295	(279	)	211,679	(2,951	)	300,974	(3,230	)

The temporary loss position associated with debt securities is the result of changes in interest rates relative to the coupon of the individual security and changes in credit spreads. In addition, there remains a lack of liquidity in certain sectors of the mortgage-backed securities market. Increases in delinquencies and foreclosures have resulted in limited trading activity and significant price declines, regardless of favorable movements in interest rates. The Company does not have the intent to sell securities in a temporary loss position at December 31, 2015, nor is it more likely than not that the Company will be required to sell the securities before the anticipated recovery.

The number of securities in an unrealized loss position as of December 31, 2015 totaled 64, compared with 43 at December 31, 2014. There were three private label mortgage-backed securities in an unrealized loss position at December 31, 2015, with an amortized cost of $773,000 and unrealized losses totaling $5,000. All three private label mortgage-backed securities were investment grade at December 31, 2015.