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Investment Securities
 3 Months Ended
Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
At March 31, 2016, the Company had $984.2 million and $472.9 million in available for sale and held to maturity investment securities, respectively. Many factors, including lack of liquidity in the secondary market for certain securities, variations in pricing information, regulatory actions, changes in the business environment or any changes in the competitive marketplace could have an adverse effect on the Company’s investment portfolio which could result in other-than-temporary impairment ("OTTI") on certain investment securities in future periods. The total number of held to maturity and available for sale securities in an unrealized loss position as of March 31, 2016 totaled 53, compared with 163 at December 31, 2015. All securities with unrealized losses at March 31, 2016 were analyzed for other-than-temporary impairment. Based upon this analysis, the Company believes that as of March 31, 2016, such securities with unrealized losses do not represent impairments that are other-than-temporary.
Securities Available for Sale
The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for securities available for sale at March 31, 2016 and December 31, 2015 (in thousands):
 

March 31, 2016
 

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses
 
Fair
value
US Treasury obligations
 
$
8,003

 
44

 
—

 
8,047

Agency obligations

79,307


296


(3
)
 
79,600

Mortgage-backed securities

868,946


17,856


(161
)
 
886,641

State and municipal obligations

4,183


139


—

 
4,322

Corporate obligations
 
5,016

 
72

 
(13
)
 
5,075

Equity securities

397


124


—

 
521

 

$
965,852


18,531


(177
)
 
984,206

 
 
December 31, 2015
 
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
US 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


The amortized cost and fair value of securities available for sale at March 31, 2016, 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.
 
 
March 31, 2016
 
 
Amortized
cost
 
Fair
value
Due in one year or less
 
$
31,520

 
31,566

Due after one year through five years
 
59,038

 
59,328

Due after five years through ten years
 
3,680

 
3,778

Due after ten years
 
2,271

 
2,372

 
 
$
96,509

 
97,044


Mortgage-backed securities totaling $868.9 million at amortized cost and $886.6 million at fair value are excluded from the table above as their expected lives are likely 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 $521,000 at fair value.
For the three months ended March 31, 2016, proceeds from sales on securities available for sale totaled $2,106,000 resulting in gross gains of $95,000 and no gross losses. For the same period last year, there were no sales of securities from the available for sale portfolio. For the three months ended March 31, 2016, there were no calls of securities from the available for sale portfolio. For the three months ended March 31, 2015, proceeds from calls on securities available for sale totaled $465,000, resulting in gross gains of $2,000 and no gross losses.
The Company did not incur an OTTI charge on securities in the available for sale portfolio for the three months ended March 31, 2016 and 2015.
The following tables represent the Company’s disclosure regarding securities available for sale with temporary impairment at March 31, 2016 and December 31, 2015 (in thousands):
 

March 31, 2016 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
Agency obligations

10,033

 
(3
)
 
—

 
—

 
10,033

 
(3
)
Mortgage-backed securities

31,086

 
(74
)
 
16,614

 
(87
)
 
47,700

 
(161
)
Corporate obligations
 
999

 
—

 
989

 
(13
)
 
1,988

 
(13
)


$
42,118

 
(77
)
 
17,603

 
(100
)
 
59,721

 
(177
)
 

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
)

The temporary loss position associated with certain securities available for sale was the result of changes in market interest rates relative to the coupon of the individual security and changes in credit spreads. The Company does not have the intent to sell securities in a temporary loss position at March 31, 2016, nor is it more likely than not that the Company will be required to sell the securities before their prices recover.
The number of available for sale securities in an unrealized loss position at March 31, 2016 totaled 15, compared with 64 at December 31, 2015. At March 31, 2016, there were three private label mortgage-backed securities in an unrealized loss position, with an amortized cost of $690,000 and an unrealized loss of $5,000. These private label mortgage-backed securities were investment grade at March 31, 2016.
The Company estimates the loss projections for each 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 three months ended March 31, 2016. The Company believes that no other-than-temporary impairment of the securities available for sale portfolio existed for the three months ended March 31, 2016.
Investment Securities Held to Maturity
The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for investment securities held to maturity at March 31, 2016 and December 31, 2015 (in thousands):
 
 
March 31, 2016
 
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
Agency obligations

$
4,197

 
8

 
—

 
4,205

Mortgage-backed securities

1,403

 
55

 
—

 
1,458

State and municipal obligations

457,427

 
18,557

 
(251
)
 
475,733

Corporate obligations

9,907

 
52

 
(6
)
 
9,953

 

$
472,934

 
18,672

 
(257
)
 
491,349

 
 
 
 
 
 
 
 
 

 
 
December 31, 2015
 
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
Agency obligations
 
$
4,096

 
9

 
(8
)
 
4,097

Mortgage-backed securities
 
1,597

 
61

 
—

 
1,658

State and municipal obligations
 
458,062

 
15,094

 
(495
)
 
472,661

Corporate obligations
 
9,929

 
11

 
(25
)
 
9,915

 
 
$
473,684

 
15,175

 
(528
)
 
488,331


The Company generally purchases securities for long-term investment purposes, and differences between amortized cost and fair values may fluctuate during the investment period. There were no sales of securities from the held to maturity portfolio for the three months ended March 31, 2016 and 2015. For the three months ended March 31, 2016, the Company recognized gross gains of $1,000 and no gross losses related to calls of certain securities in the held to maturity portfolio, with proceeds from the calls totaling $516,000. For the same period in 2015, proceeds from calls on securities held to maturity totaled $4.1 million, with no gross gains or losses recognized.
The amortized cost and fair value of investment securities in the held to maturity portfolio at March 31, 2016 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.
 
 
March 31, 2016
 
 
Amortized
cost
 
Fair
value
Due in one year or less

$
11,538

 
11,589

Due after one year through five years

52,697

 
53,797

Due after five years through ten years

221,145

 
231,977

Due after ten years

186,151

 
192,528



$
471,531

 
489,891


Mortgage-backed securities totaling $1.4 million at amortized cost and $1.5 million at fair value are excluded from the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.
The following tables represent the Company’s disclosure on investment securities held to maturity with temporary impairment at March 31, 2016 and December 31, 2015 (in thousands):
 
 
March 31, 2016 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
State and municipal obligations

10,388

 
(71
)
 
9,984

 
(180
)
 
20,372

 
(251
)
Corporate obligations

1,245

 
(6
)
 
—

 
—

 
1,245

 
(6
)
 

$
11,633

 
(77
)
 
9,984

 
(180
)
 
21,617

 
(257
)
 
 
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
Agency obligations
 
$
1,244

 
(6
)
 
278

 
(2
)
 
1,522

 
(8
)
State and municipal obligations
 
24,266

 
(165
)
 
17,746

 
(330
)
 
42,012

 
(495
)
Corporate obligations
 
5,840

 
(18
)
 
744

 
(7
)
 
6,584

 
(25
)
 
 
$
31,350

 
(189
)
 
18,768

 
(339
)
 
50,118

 
(528
)

Based upon the review of the held to maturity securities portfolio, the Company believes that as of March 31, 2016, securities with unrealized loss positions shown above do not represent impairments that are other-than-temporary. The review of the portfolio for other-than-temporary impairment considers the percentage and length of time the fair value of an investment is below book value, as well as general market conditions, changes in interest rates, credit risks, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company would be required to sell the securities before their prices recover.
The number of held to maturity securities in an unrealized loss position at March 31, 2016 totaled 38, compared with 99 at December 31, 2015. The decrease in the number of securities in an unrealized loss position at March 31, 2016, was largely due to an increase in market interest rates from December 31, 2015. All temporarily impaired investment securities were investment grade at March 31, 2016.