3. INVESTMENT SECURITIES

The carrying amounts and fair values of investment securities at December 31, 2015 and 2014 are summarized as follows:



	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	(in thousands)
Available-for-sale
Collateralized debt obligations	$	50	$	10,059	$	(49	)	$	10,060
Commercial MBS issued by GSEs	19,147		72		(105		)	19,114
Corporate debt securities	12,769		482		—			13,251
CRA investments	34,722		—		(37		)	34,685
Municipal obligations	320,087		14,743		—			334,830
Preferred stock	108,417		4,286		(1,467		)	111,236
Private label commercial MBS	4,685		6		—			4,691
Private label residential MBS	261,530		5		(4,407		)	257,128
Residential MBS issued by GSEs	1,169,631		5,254		(4,664		)	1,170,221
Trust preferred securities	32,000		—		(7,686		)	24,314
U.S. treasury securities	2,996		—		(3		)	2,993
Total AFS securities	$	1,966,034	$	34,907	$	(18,418	)	$	1,982,523

Securities measured at fair value
Residential MBS issued by GSEs								$	1,481



	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	(in thousands)
Available-for-sale
Collateralized debt obligations	$	50	$	11,395	$	—		$	11,445
Commercial MBS issued by GSEs	2,047		100		—			2,147
Corporate debt securities	52,773		717		(1,001		)	52,489
CRA investments	24,302		30		—			24,332
Municipal obligations	285,398		13,688		(49		)	299,037
Mutual funds	37,449		500		(247		)	37,702
Preferred stock	83,192		2,099		(2,679		)	82,612
Private label commercial MBS	5,017		132		—			5,149
Private label residential MBS	70,985		379		(1,121		)	70,243
Residential MBS issued by GSEs	881,734		11,440		(1,985		)	891,189
Trust preferred securities	32,000		—		(6,454		)	25,546
U.S. government-sponsored agency securities	18,701		—		(355		)	18,346
Total AFS securities	$	1,493,648	$	40,480	$	(13,891	)	$	1,520,237

Securities measured at fair value
Residential MBS issued by GSEs								$	1,858

For additional information on the fair value changes of securities measured at fair value, see the trading securities table in "Note 17. Fair Value Accounting" of these Notes to Consolidated Financial Statements.

The Company conducts an OTTI analysis on a quarterly basis. The initial indication of OTTI for both debt and equity securities is a decline in the market value below the amount recorded for an investment, and taking into account the severity and duration of the decline. Another potential indication of OTTI is a downgrade below investment grade. In determining whether an impairment is OTTI, the Company considers the length of time and the extent to which the market value has been below cost, recent events specific to the issuer, including investment downgrades by rating agencies and economic conditions of its industry, and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. For marketable equity securities, the Company also considers the issuer’s financial condition, capital strength, and near-term prospects.

For debt securities, for the purpose of an OTTI analysis, the Company also considers the cause of the price decline (general level of interest rates, credit spreads, and industry and issuer-specific factors), the issuer’s financial condition, near-term prospects, and current ability to make future payments in a timely manner, as well as the issuer’s ability to service debt, and any change in agencies’ ratings at the evaluation date from the acquisition date and any likely imminent action.

The Company has reviewed securities for which there is an unrealized loss in accordance with its accounting policy for OTTI described above and determined that there were no impairment charges for the years ended December 31, 2015, 2014, and 2013. The Company does not consider any securities to be other-than-temporarily impaired as of December 31, 2015 and 2014. No assurance can be made that OTTI will not occur in future periods.

Information pertaining to securities with gross unrealized losses at December 31, 2015 and 2014, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:



	December 31, 2015
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in thousands)
Available-for-sale
Collateralized debt obligations	$	49	$	1	$	—	$	—	$	49	$	1
Commercial MBS issued by GSEs	105		17,051		—		—		105		17,051
CRA investments	37		24,729		—		—		37		24,729
Preferred stock	377		10,542		1,090		14,761		1,467		25,303
Private label residential MBS	3,733		226,720		674		30,372		4,407		257,092
Residential MBS issued by GSEs	3,566		536,515		1,098		38,338		4,664		574,853
Trust preferred securities	—		—		7,686		24,314		7,686		24,314
U.S. treasury securities	3		2,006		—		—		3		2,006
Total AFS securities	$	7,870	$	817,564	$	10,548	$	107,785	$	18,418	$	925,349



	December 31, 2014
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in thousands)
Available-for-sale
Corporate debt securities	$	139	$	9,860	$	862	$	29,139	$	1,001	$	38,999
Municipal obligations	—		—		49		4,430		49		4,430
Mutual funds	247		25,855		—		—		247		25,855
Preferred stock	232		13,811		2,447		28,109		2,679		41,920
Private label residential MBS	157		24,056		964		26,614		1,121		50,670
Residential MBS issued by GSEs	227		49,217		1,758		97,296		1,985		146,513
Trust preferred securities	—		—		6,454		25,546		6,454		25,546
U.S. government sponsored agency securities	—		—		355		18,346		355		18,346
Total AFS securities	$	1,002	$	122,799	$	12,889	$	229,480	$	13,891	$	352,279

At December 31, 2015 and 2014, the Company’s unrealized losses relate primarily to interest rate fluctuations, credit spread widening, and reduced liquidity in applicable markets. The total number of securities in an unrealized loss position at December 31, 2015 was 146, compared to 109 at December 31, 2014. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysis reports. Since material downgrades have not occurred and management does not intend to sell the debt securities in an unrealized loss position in the foreseeable future, none of the securities described in the above table or in this paragraph were deemed to be OTTI.

The preferred stock and trust preferred securities have yields based on floating rate LIBOR, which are highly correlated to the federal funds rate and have been negatively affected by the low rate environment. This has resulted in unrealized losses for these securities.

The amortized cost and fair value of securities as of December 31, 2015, by contractual maturities, are shown below. MBS are shown separately as individual MBS are comprised of pools of loans with varying maturities. Therefore, these securities are listed separately in the maturity summary.



	December 31, 2015
	Amortized Cost		Estimated Fair Value
	(in thousands)
Available-for-sale
Due in one year or less	$	62,852	$	63,114
After one year through five years	77,273		81,090
After five years through ten years	68,935		72,283
After ten years	301,981		314,882
Mortgage-backed securities	1,454,993		1,451,154
Total AFS securities	$	1,966,034	$	1,982,523

The following tables summarize the carrying amount of the Company’s investment ratings position as of December 31, 2015 and 2014:



	December 31, 2015
	AAA		Split-rated AAA/AA+		AA+ to AA-		A+ to A-		BBB+ to BBB-		BB+ and below		Unrated		Totals
	(in thousands)
Available-for-sale
Collateralized debt obligations	$	—	$	—	$	—	$	—	$	—	$	10,060	$	—	$	10,060
Commercial MBS issued by GSEs	—		19,114		—		—		—		—		—		19,114
Corporate debt securities	—		—		2,721		5,489		5,041		—		—		13,251
CRA investments	—		—		—		—		—		—		34,685		34,685
Municipal obligations	7,949		—		180,460		131,110		6,243		180		8,888		334,830
Preferred stock	—		—		—		—		79,955		23,655		7,626		111,236
Private label commercial MBS	4,691		—		—		—		—		—		—		4,691
Private label residential MBS	235,605		—		40		3,186		1,750		2,705		13,842		257,128
Residential MBS issued by GSEs	—		1,170,221		—		—		—		—		—		1,170,221
Trust preferred securities	—		—		—		—		24,314		—		—		24,314
U.S. treasury securities	—		2,993		—		—		—		—		—		2,993
Total AFS securities (1)	$	248,245	$	1,192,328	$	183,221	$	139,785	$	117,303	$	36,600	$	65,041	$	1,982,523

Securities measured at fair value
Residential MBS issued by GSEs	$	—	$	1,481	$	—	$	—	$	—	$	—	$	—	$	1,481


(1)	The Company uses the average credit rating of the combination of S&P, Moody’s, and Fitch, where ratings differ.



	December 31, 2014
	AAA		Split-rated AAA/AA+		AA+ to AA-		A+ to A-		BBB+ to BBB-		BB+ and below		Unrated		Totals
	(in thousands)
Available-for-sale
Collateralized debt obligations	$	—	$	—	$	—	$	—	$	—	$	11,445	$	—	$	11,445
Commercial MBS issued by GSEs	—		2,147		—		—		—		—		—		2,147
Corporate debt securities	—		—		2,759		5,570		44,160		—		—		52,489
CRA investments	—		—		—		—		—		—		24,332		24,332
Municipal obligations	8,168		—		138,256		146,155		6,263		195		—		299,037
Mutual funds (2)	—		—		—		—		37,702		—		—		37,702
Preferred stock	—		—		—		—		54,585		17,632		10,395		82,612
Private label commercial MBS	5,149		—		—		—		—		—		—		5,149
Private label residential MBS	59,944		—		68		3,439		3,595		3,197		—		70,243
Residential MBS issued by GSEs	—		891,189		—		—		—		—		—		891,189
Trust preferred securities	—		—		—		—		25,546		—		—		25,546
U.S. government sponsored agency securities	—		18,346		—		—		—		—		—		18,346
Total AFS securities (1)	$	73,261	$	911,682	$	141,083	$	155,164	$	171,851	$	32,469	$	34,727	$	1,520,237

Securities measured at fair value
Residential MBS issued by GSEs	$	—	$	1,858	$	—	$	—	$	—	$	—	$	—	$	1,858


(1)	The Company uses the average credit rating of the combination of S&P, Moody’s, and Fitch, where ratings differ.


(2)	At least 80% of mutual funds are investment grade corporate debt securities.

Securities with carrying amounts of approximately $830.7 million and $755.5 million at December 31, 2015 and 2014, respectively, were pledged for various purposes as required or permitted by law.

The following table presents gross gains and losses on sales of investment securities:



	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Gross gains	$	1,144		$	1,118		$	1,569
Gross losses	(529		)	(361		)	(2,764		)
Net gains on sales of investment securities	$	615		$	757		$	(1,195	)