Note 3 Investment Securities

The Company’s investment securities portfolio is comprised of available-for-sale and held-to-maturity investment securities. These investment securities totaled $1.4 billion at June 30, 2016 and were comprised of $1.0 billion of available-for-sale securities and $0.4 billion of held-to-maturity securities. At December 31, 2015, investment securities totaled $1.6 billion and were comprised of $1.2 billion of available-for-sale securities and $0.4 billion of held-to-maturity securities.

Available-for-sale

At June 30, 2016 and December 31, 2015, the Company held $1.0 billion and $1.2 billion of available-for-sale investment securities, respectively. Available-for-sale investment securities are summarized as follows as of the dates indicated:


	June 30, 2016
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	265,667	$	8,575	$	—	$	274,242
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		765,669		4,235		(3,710)		766,194
Municipal securities		5,180		12		—		5,192
Other securities		419		—		—		419
Total	$	1,036,935	$	12,822	$	(3,710)	$	1,046,047


	December 31, 2015
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	305,773	$	5,721	$	(516)	$	310,978
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		861,321		3,638		(19,416)		845,543
Municipal securities		306		—		—		306
Other securities		419		—		—		419
Total	$	1,167,819	$	9,359	$	(19,932)	$	1,157,246

At June 30, 2016 and December 31, 2015, mortgage-backed securities represented primarily all of the Company’s available-for-sale investment portfolio and all mortgage-backed securities were backed by government sponsored enterprises (“GSE”) collateral such as Federal Home Loan Mortgage Corporation (“FHLMC”) and Federal National Mortgage Association (“FNMA”), and the government sponsored agency Government National Mortgage Association (“GNMA”).

The table below summarizes the unrealized losses as of the dates shown, along with the length of the impairment period:


	June 30, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	15,714	$	(30)	$	461,067	$	(3,680)	$	476,781	$	(3,710)
Total	$	15,714	$	(30)	$	461,067	$	(3,680)	$	476,781	$	(3,710)


	December 31, 2015
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	109,182	$	(516)	$	—	$	—	$	109,182	$	(516)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		67,527		(404)		575,954		(19,012)		643,481		(19,416)
Total	$	176,709	$	(920)	$	575,954	$	(19,012)	$	752,663	$	(19,932)

Management evaluated all of the available-for-sale securities in an unrealized loss position and concluded that no OTTI existed at June 30, 2016 or December 31, 2015. The unrealized losses in the Company's investments issued or guaranteed by U.S. government agencies or sponsored enterprises at June 30, 2016 were caused by changes in interest rates. The portfolio included 42 securities, having an aggregate fair value of $476.8 million, which were in an unrealized loss position at June 30, 2016, compared to 66 securities, with a fair value of $752.7 million, at December 31, 2015. The Company has no intention to sell these securities before recovery of their amortized cost and believes it will not be required to sell the securities before the recovery of their amortized cost.

Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the Federal Reserve Bank, if needed. The fair value of available-for-sale investment securities pledged as collateral totaled $309.3 million at June 30, 2016 and $335.8 million at December 31, 2015. The decrease in pledged available-for-sale investment securities was primarily attributable to a decrease in average deposit account balances and client repurchase account balances during the six months ended June 30, 2016. Certain investment securities may also be pledged as collateral for the line of credit at the Federal Home Loan Bank ("FHLB") of Topeka; at June 30, 2016, $57.6 million in investment securities were pledged for this purpose. No securities were pledged for this purpose at December 31, 2015.

Mortgage-backed securities do not have a single maturity date and actual maturities may differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average life of the available-for-sale mortgage-backed securities portfolio was 3.1 years as of June 30, 2016 and 3.6 years as of December 31, 2015. This estimate is based on assumptions and actual results may differ. As of June 30, 2016, municipal securities with an amortized cost and fair value of $4.2 million were due after one year through five years, while municipal securities with an amortized cost and fair value of $1.0 million were due after five years through ten years. Other securities of $0.4 million as of June 30, 2016, have no stated contractual maturity date.

Held-to-maturity

At June 30, 2016 and December 31, 2015, the Company held $381.2 million and $427.5 million of held-to-maturity investment securities, respectively. Held-to-maturity investment securities are summarized as follows as of the dates indicated:


	June 30, 2016
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	302,852	$	6,746	$	—	$	309,598
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		78,320		506		(319)		78,507
Total investment securities held-to-maturity	$	381,172	$	7,252	$	(319)	$	388,105


	December 31, 2015
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	340,131	$	2,911	$	(230)	$	342,812
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		87,372		35		(1,634)		85,773
Total investment securities held-to-maturity	$	427,503	$	2,946	$	(1,864)	$	428,585

The table below summarizes the unrealized losses as of the dates shown, along with the length of the impairment period:


	June 30, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securities (“MBS”):
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	—	$	36,935	$	(319)	$	36,935	$	(319)
Total	$	—	$	—	$	36,935	$	(319)	$	36,935	$	(319)


	December 31, 2015
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	34,641	$	(205)	$	853	$	(25)	$	35,494	$	(230)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		28,490		(180)		45,872		(1,454)		74,362		(1,634)
Total	$	63,131	$	(385)	$	46,725	$	(1,479)	$	109,856	$	(1,864)

The portfolio included 4 securities, having an aggregate fair value of $36.9 million, which were in an unrealized loss position at June 30, 2016, compared to twelve securities, with a fair value of $109.9 million, at December 31, 2015.

Management evaluated all of the held-to-maturity securities in an unrealized loss position and concluded that no OTTI existed at June 30, 2016 or December 31, 2015. The unrealized losses in the Company's investments issued or guaranteed by U.S. government agencies or sponsored enterprises at June 30, 2016 were caused by changes in interest rates. The Company has no intention to sell these securities before recovery of their amortized cost and believes it will not be required to sell the securities before the recovery of their amortized cost.

The carrying value of held-to-maturity investment securities pledged as collateral totaled $233.7 million and $156.5 million at June 30, 2016 and December 31, 2015, respectively.

Actual maturities of mortgage-backed securities may differ from scheduled maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of June 30, 2016 and December 31, 2015 was 3.1 years and 3.7 years, respectively. This estimate is based on assumptions and actual results may differ.