Investment Securities

At March 31, 2017, the Company had $1.05 billion and $489.1 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, 2017 totaled 360, compared with 419 at December 31, 2016. All securities with unrealized losses at March 31, 2017 were analyzed for other-than-temporary impairment. Based upon this analysis, the Company believes that as of March 31, 2017, 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, 2017 and December 31, 2016 (in thousands):



	March 31, 2017
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
US Treasury obligations	$	7,992	4	—		7,996
Agency obligations	49,088		47	(27	)	49,108
Mortgage-backed securities	967,483		6,930	(7,095	)	967,318
State and municipal obligations	3,717		74	—		3,791
Corporate obligations	19,013		346	(11	)	19,348
Equity securities	397		161	—		558
	$	1,047,690	7,562	(7,133	)	1,048,119



	December 31, 2016
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
US Treasury obligations	$	7,995	13	—		8,008
Agency obligations	57,123		90	(25	)	57,188
Mortgage-backed securities	952,992		7,249	(8,380	)	951,861
State and municipal obligations	3,727		19	(3	)	3,743
Corporate obligations	19,013		35	(11	)	19,037
Equity securities	397		152	—		549
	$	1,041,247	7,558	(8,419	)	1,040,386

The amortized cost and fair value of securities available for sale at March 31, 2017, 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, 2017
	Amortized cost		Fair value
Due in one year or less	$	51,483	51,466
Due after one year through five years	9,452		9,516
Due after five years through ten years	18,875		19,261
Due after ten years	—		—
	$	79,810	80,243

Mortgage-backed securities totaling $967.5 million at amortized cost and $967.3 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 $558,000 at fair value.

No securities were sold from the securities available for sale portfolio for the three months ended March 31, 2017. For the same period last year, proceeds from sales on securities available for sale totaled $2.1 million resulting in gross gains of $95,000 and no gross losses. Also, there were no calls on securities available for sale for the three months ended March 31, 2017 and March 31, 2016.

The following tables represent the Company’s disclosure regarding securities available for sale with temporary impairment at March 31, 2017 and December 31, 2016 (in thousands):



	March 31, 2017 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	$	23,046	(27	)	—	—		23,046	(27	)
Mortgage-backed securities	$	547,912	(7,092	)	65	(3	)	547,977	(7,095	)
Corporate obligations	—		—		990	(11	)	990	(11	)
	$	570,958	(7,119	)	1,055	(14	)	572,013	(7,133	)



	December 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	14,000		(25	)	—	—		14,000	(25	)
Mortgage-backed securities	553,629		(8,377	)	65	(3	)	553,694	(8,380	)
State and municipal obligations	661		(3	)	—	—		661	(3	)
Corporate obligations	—		—		990	(11	)	990	(11	)
	$	568,290	(8,405	)	1,055	(14	)	569,345	(8,419	)

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, 2017, 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, 2017 totaled 90, compared with 87 at December 31, 2016. At March 31, 2017, there were two private label mortgage-backed securities in an unrealized loss position, with an amortized cost of $74,000 and an unrealized loss of $3,000. These private label mortgage-backed securities were investment grade at March 31, 2017.

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 OTTI existed during the three months ended March 31, 2017 and 2016. The Company concluded that no OTTI of the securities available for sale portfolio existed for the three months ended March 31, 2017 and 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, 2017 and December 31, 2016 (in thousands):



	March 31, 2017
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
Agency obligations	$	4,656	—	(84	)	4,572
Mortgage-backed securities	680		25	—		705
State and municipal obligations	474,677		7,871	(4,031	)	478,517
Corporate obligations	9,101		9	(41	)	9,069
	$	489,114	7,905	(4,156	)	492,863



	December 31, 2016
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
Agency obligations	$	4,306	2	(83	)	4,225
Mortgage-backed securities	893		31	—		924
State and municipal obligations	473,653		6,635	(5,436	)	474,852
Corporate obligations	9,331		7	(52	)	9,286
	$	488,183	6,675	(5,571	)	489,287

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, 2017 and 2016. For the three months ended March 31, 2017, proceeds from calls on certain securities in the held to maturity portfolio totaled $12.8 million, with no gross gains and no gross losses recognized. For the three months ended March 31, 2016, proceeds from calls of certain securities in the held to maturity portfolio totaled $516,000, with gross gains totaling $1,000 and no gross losses recognized.

The amortized cost and fair value of investment securities in the held to maturity portfolio at March 31, 2017 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, 2017
	Amortized cost		Fair value
Due in one year or less	$	22,570	22,609
Due after one year through five years	56,055		56,920
Due after five years through ten years	250,371		254,015
Due after ten years	159,438		158,614
	$	488,434	492,158

Mortgage-backed securities totaling $680,000 at amortized cost and $705,000 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, 2017 and December 31, 2016 (in thousands):



	March 31, 2017 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	$	3,823	(84	)	—	—		3,823	(84	)
State and municipal obligations	133,078		(3,740	)	6,995	(291	)	140,073	(4,031	)
Corporate obligations	5,712		(41	)	—	—		5,712	(41	)
	$	142,613	(3,865	)	6,995	(291	)	149,608	(4,156	)



	December 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	$	3,525	(83	)	—	—		3,525	(83	)
State and municipal obligations	172,152		(5,132	)	6,617	(304	)	178,769	(5,436	)
Corporate obligations	4,697		(52	)	—			4,697	(52	)
	$	180,374	(5,267	)	6,617	(304	)	186,991	(5,571	)

Based upon the review of the held to maturity securities portfolio, the Company believes that as of March 31, 2017, securities with unrealized loss positions shown above do not represent impairments that are other-than-temporary. The review of the portfolio for OTTI 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, 2017 totaled 270, compared with 332 at December 31, 2016. The decrease in the number of securities in an unrealized loss position at March 31, 2017, was due to a slight decrease in market interest rates from December 31, 2016 and a tightening of spreads in the municipal bond sector. All temporarily impaired investment securities were investment grade at March 31, 2017.