Note 4 Investment Securities

The Company’s investment securities portfolio is comprised of available-for-sale and held-to-maturity investment securities. These investment securities totaled $1.2 billion at March 31, 2018 and included $0.9 billion of available-for-sale securities and $0.3 billion of held-to-maturity securities. At December 31, 2017, investment securities totaled $1.1 billion and included $0.8 billion of available-for-sale securities and $0.3 billion of held-to-maturity securities.

Available-for-sale

At March 31, 2018 and December 31, 2017, the Company held $0.9 billion of available-for-sale investment securities. Available-for-sale securities are summarized as follows as of the dates indicated:


	March 31, 2018
	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	$	189,430	$	1,635	$	(2,435)	$	188,630
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		751,497		151		(23,919)		727,729
Municipal securities		1,054		—		(17)		1,037
Other securities		469		—		—		469
Total investment securities available-for-sale	$	942,450	$	1,786	$	(26,371)	$	917,865


	December 31, 2017
	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	$	167,269	$	2,371	$	(992)	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		702,107		351		(17,228)		685,230
Municipal securities		1,054		—		(6)		1,048
Other securities		419		—		—		419
Total investment securities available-for-sale	$	870,849	$	2,722	$	(18,226)	$	855,345

At March 31, 2018 and December 31, 2017, 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 tables below summarize the available-for-sale securities with unrealized losses as of the dates shown, along with the length of the impairment period:


	March 31, 2018
	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	$	99,713	$	(1,579)	$	32,040	$	(856)	$	131,753	$	(2,435)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		274,644		(3,894)		385,797		(20,025)		660,441		(23,919)
Municipal securities		503		(17)		—		—		503		(17)
Total	$	374,860	$	(5,490)	$	417,837	$	(20,881)	$	792,697	$	(26,371)


	December 31, 2017
	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	$	62,178	$	(408)	$	36,086	$	(584)	$	98,264	$	(992)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		162,346		(830)		412,967		(16,398)		575,313		(17,228)
Municipal securities		514		(6)		—		—		514		(6)
Total	$	225,038	$	(1,244)	$	449,053	$	(16,982)	$	674,091	$	(18,226)

The unrealized losses in the Company's investment portfolio at March 31, 2018 were caused by changes in interest rates. The portfolio included 205 securities, having an aggregate fair value of $792.7 million, which were in an unrealized loss position at March 31, 2018, compared to 87 securities, with an aggregate fair value of $674.1 million at December 31, 2017.

Management evaluated all of the available for sale securities in an unrealized loss position at March 31, 2018 and December 31, 2017, and identified one municipal security with other-than-temporary impairment (OTTI), with an aggregate fair value of $0.3 million and $0.3 million, respectively. No OTTI charges were recorded during the three months ended March 31, 2018 and 2017. The unrealized losses on the remaining securities in an unrealized loss position 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.

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 and Federal Home Loan Bank (“FHLB”), if needed. The fair value of available-for-sale investment securities pledged as collateral totaled $427.8 million and $334.6 million at March 31, 2018 and December 31, 2017, respectively. Certain investment securities may also be pledged as collateral for the line of credit at the FHLB; at March 31, 2018 or December 31, 2017, no securities were pledged for this purpose.

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 3.5 years and 3.4 years at March 31, 2018 and December 31, 2017, respectively. This estimate is based on assumptions and actual results may differ. At March 31, 2018 and December 31, 2017, the duration of the total available-for-sale investment portfolio was 3.1 years and 3.1 years, respectively.

As of March 31, 2018, municipal securities with an amortized cost and fair value of $0.2 million were due after one year through five years, while municipal securities with an amortized cost and fair value of $0.5 million were due after five years through ten years. Other securities and municipal securities of $0.8 million as of March 31, 2018, have no stated contractual maturity date.

Held-to-maturity

At March 31, 2018 and December 31, 2017, the Company held $283.4 million and $258.7 million of held-to-maturity investment securities, respectively. Held-to-maturity investment securities are summarized as follows as of the dates indicated:


	March 31, 2018
			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	$	191,136	$	8	$	(2,535)	$	188,609
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		92,233		5		(2,131)		90,107
Total investment securities held-to-maturity	$	283,369	$	13	$	(4,666)	$	278,716


	December 31, 2017
			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	$	204,352	$	151	$	(455)	$	204,048
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		54,378		—		(1,655)		52,723
Total investment securities held-to-maturity	$	258,730	$	151	$	(2,110)	$	256,771

The tables below summarize the held-to-maturity securities with unrealized losses as of the dates shown, along with the length of the impairment period:


	March 31, 2018
	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	$	171,017	$	(2,059)	$	16,202	$	(476)	$	187,219	$	(2,535)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		6,018		(139)		43,350		(1,992)		49,368		(2,131)
Total	$	177,035	$	(2,198)	$	59,552	$	(2,468)	$	236,587	$	(4,666)


	December 31, 2017
	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	$	149,182	$	(220)	$	17,506	$	(235)	$	166,688	$	(455)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		6,460		(65)		46,264		(1,590)		52,724		(1,655)
Total	$	155,642	$	(285)	$	63,770	$	(1,825)	$	219,412	$	(2,110)

The held-to-maturity portfolio included 48 securities, having an aggregate fair value of $236.6 million, which were in an unrealized loss position at March 31, 2018, compared to 36 securities, with a fair value of $219.4 million, at December 31, 2017.

Management evaluated all of the held-to-maturity securities in an unrealized loss position and concluded that no OTTI existed at March 31, 2018 or December 31, 2017. The unrealized losses in the Company's investments at March 31, 2018 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 $140.8 million and $142.0 million at March 31, 2018 and December 31, 2017, 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 March 31, 2018 and December 31, 2017 was 3.1 years and 3.1 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 2.6 years and 2.8 years as of March 31, 2018 and December 31, 2017, respectively.