Investment Securities

At March 31, 2018, the Company had $1.04 billion and $466.9 million in available for sale debt securities and held to maturity debt 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") in future periods. The total number of available for sale and held to maturity debt securities in an unrealized loss position as of March 31, 2018 totaled 580, compared with 306 at December 31, 2017. All securities with unrealized losses at March 31, 2018 were analyzed for OTTI. Based upon this analysis, the Company believes that as of March 31, 2018, such securities with unrealized losses do not represent impairments that are other-than-temporary.

Available for Sale Debt Securities

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for available for sale debt securities at March 31, 2018 and December 31, 2017 (in thousands):



	March 31, 2018
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
Agency obligations	$	7,007	—	(8	)	6,999
Mortgage-backed securities	1,021,819		2,372	(20,588	)	1,003,603
State and municipal obligations	3,249		81	—		3,330
Corporate obligations	25,044		377	(49	)	25,372
	$	1,057,119	2,830	(20,645	)	1,039,304



	December 31, 2017
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
Agency obligations	$	19,014	—	(9	)	19,005
Mortgage-backed securities	993,548		4,914	(10,095	)	988,367
State and municipal obligations	3,259		129	—		3,388
Corporate obligations	26,047		359	(12	)	26,394
	$	1,041,868	5,402	(10,116	)	1,037,154

The amortized cost and fair value of available for sale debt securities at March 31, 2018, 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, 2018
	Amortized cost		Fair value
Due in one year or less	$	7,397	7,392
Due after one year through five years	3,008		2,979
Due after five years through ten years	24,895		25,330
Due after ten years	—		—
	$	35,300	35,701

Mortgage-backed securities totaling $1.02 billion at amortized cost and $1.00 billion 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.

For the three months ended March 31, 2018 and 2017, no securities were sold or called from the available for sale debt securities portfolio.

The following tables present the fair value and gross unrealized losses for available for sale debt securities with temporary impairment at March 31, 2018 and December 31, 2017 (in thousands):



	March 31, 2018 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	$	5,000	(7	)	1,999	(1	)	6,999	(8	)
Mortgage-backed securities	646,962		(11,513	)	227,119	(9,075	)	874,081	(20,588	)
Corporate obligations	7,959		(49	)	—	—		7,959	(49	)
	$	659,921	(11,569	)	229,118	(9,076	)	889,039	(20,645	)



	December 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	$	12,006	(8	)	6,999	(1	)	19,005	(9	)
Mortgage-backed securities	420,746		(3,936	)	235,056	(6,159	)	655,802	(10,095	)
Corporate obligations	—		—		989	(12	)	989	(12	)
	$	432,752	(3,944	)	243,044	(6,172	)	675,796	(10,116	)

The number of available for sale debt securities in an unrealized loss position at March 31, 2018 totaled 177, compared with 122 at December 31, 2017. The increase in the number of securities in an unrealized loss position at March 31, 2018, was due to higher market interest rates from December 31, 2017. All temporarily impaired investment securities were investment grade at March 31, 2018. At March 31, 2018, there was one private label mortgage-backed security in an unrealized loss position, with an amortized cost of $32,000 and an unrealized loss of $384. This private label mortgage-backed security was investment grade at March 31, 2018.

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 three months ended March 31, 2018. Based on its detailed review of the available for sale debt securities portfolio, the Company believes that as of March 31, 2018, securities with unrealized loss positions shown above do not represent impairments that are other-than-temporary. The Company does not have the intent to sell securities in a temporary loss position at March 31, 2018, nor is it more likely than not that the Company will be required to sell the securities before the anticipated recovery.

Held to Maturity Debt Securities

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the estimated fair value for held to maturity debt securities at March 31, 2018 and December 31, 2017 (in thousands):



	March 31, 2018
	Amortized cost		Gross unrealized gains	Gross unrealized losses			Fair value
Agency obligations	$	4,616	—	(127		)	4,489
Mortgage-backed securities	311		11	—			322
State and municipal obligations	452,031		4,529	(5,383		)	451,177
Corporate obligations	9,987		1	(189		)	9,799
	$	466,945	4,541	$	(5,699	)	465,787



	December 31, 2017
	Amortized cost		Gross unrealized gains	Gross unrealized losses		Fair value
Agency obligations	$	4,308	—	(87	)	4,221
Mortgage-backed securities	382		14	—		396
State and municipal obligations	462,942		9,280	(1,738	)	470,484
Corporate obligations	10,020		1	(83	)	9,938
	$	477,652	9,295	(1,908	)	485,039

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 debt securities portfolio for the three months ended March 31, 2018 and 2017. For the three months ended March 31, 2018, proceeds from calls on securities from the held to maturity debt securities portfolio totaled $20.3 million with gross gains of $1,000 and no gross losses recognized. For the three months ended March 31, 2017, proceeds from calls on securities from the held to maturity debt securities portfolio totaled $12.8 million with no gross gains and no gross losses recognized.

The amortized cost and fair value of held to maturity debt securities at March 31, 2018, 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, 2018
	Amortized cost		Fair value
Due in one year or less	$	7,452	7,488
Due after one year through five years	71,292		71,458
Due after five years through ten years	255,234		254,865
Due after ten years	132,656		131,654
	$	466,634	465,465

Mortgage-backed securities totaling $311,000 at amortized cost and $322,000 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 present the fair value and gross unrealized losses on securities in the held to maturity debt securities portfolio with temporary impairment at March 31, 2018 and December 31, 2017 (in thousands):



	March 31, 2018 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	$	4,489	(127	)	—	—		4,489	(127	)
State and municipal obligations	167,074		(2,650	)	47,558	(2,733	)	214,632	(5,383	)
Corporate obligations	9,523		(189	)	—	—		9,523	(189	)
	$	181,086	(2,966	)	47,558	(2,733	)	228,644	(5,699	)



	December 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	$	3,821	(87	)	—	—		3,821	(87	)
State and municipal obligations	37,317		(295	)	49,488	(1,443	)	86,805	(1,738	)
Corporate obligations	9,662		(83	)	—			9,662	(83	)
	$	50,800	(465	)	49,488	(1,443	)	100,288	(1,908	)

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 three months ended March 31, 2018. Based on its detailed review of the held to maturity debt securities portfolio, the Company believes that as of March 31, 2018, securities with unrealized loss positions shown above do not represent impairments that are other-than-temporary. The Company does not have the intent to sell securities in a temporary loss position at March 31, 2018, nor is it more likely than not that the Company will be required to sell the securities before the anticipated recovery.

The number of held to maturity debt securities in an unrealized loss position at March 31, 2018 totaled 403, compared with 184 at December 31, 2017. The increase in the number of securities in an unrealized loss position at March 31, 2018, was due to higher market interest rates from December 31, 2017. All temporarily impaired investment securities were investment grade at March 31, 2018.