INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses and approximate fair values of available for sale debt securities are as follows:



	Amortized Cost		Unrealized				Fair Value
March 31, 2018	Amortized Cost		Gains		Losses		Fair Value
	(Dollars in thousands)
Available for sale debt securities:
U.S. Government agencies and sponsored enterprises obligations	$	91,364	$	30	$	1,384	$	90,010
U.S. Government agencies and sponsored enterprises mortgage-backed securities	611,868		187		15,619		596,436
State and municipal obligations	26,260		99		1,323		25,036
Asset-backed securities	670,439		1,388		218		671,609
Corporate bonds and other debt securities	787,471		15,625		5,617		797,479
Total available for sale debt securities	$	2,187,402	$	17,329	$	24,161	$	2,180,570

	Amortized Cost		Unrealized				Fair Value
December 31, 2017	Amortized Cost		Gains		Losses		Fair Value
	(Dollars in thousands)
Available for sale debt securities: (1)
U.S. Government agencies and sponsored enterprises obligations	$	43,471	$	38	$	671	$	42,838
U.S. Government agencies and sponsored enterprises mortgage-backed securities	600,310		1,716		6,789		595,237
State and municipal obligations	26,766		125		719		26,172
Asset-backed securities	608,340		2,306		100		610,546
Corporate bonds and other debt securities	738,994		18,222		1,313		755,903
Total available for sale debt securities	$	2,017,881	$	22,407	$	9,592	$	2,030,696

(1) To allow for improved comparability, prior year presentation has been modified to remove preferred stock and other equity securities in connection with the adoption of ASU 2016-01.

As part of the Company’s liquidity management strategy, the Company pledges loans and securities to secure borrowings from the Federal Home Loan Bank of Atlanta ("FHLB") and the Federal Reserve Bank of Atlanta ("FRB"). The Company also pledges securities to collateralize public deposits, repurchase agreements and interest rate swaps. The carrying value of all pledged securities totaled $928.8 million and $834.9 million at March 31, 2018 and December 31, 2017, respectively.

The amortized cost and estimated fair value of available for sale debt securities, by contractual maturity, are as follows:



March 31, 2018	Amortized Cost		Fair Value
	(Dollars in thousands)
Available for sale debt securities:
Due in one year or less	$	57,851	$	57,857
Due after one year through five years	303,216		303,061
Due after five years through ten years	133,064		131,885
Due after ten years	319,600		329,712
U.S. Government agencies and sponsored enterprises obligations, mortgage-backed securities and asset-backed securities	1,373,671		1,358,055
Total available for sale debt securities	$	2,187,402	$	2,180,570

For purposes of the maturity table, U.S Government agencies and sponsored enterprises obligations, agency mortgage-backed securities and asset-backed securities, the principal of which are repaid periodically, are presented as a single amount. The expected lives of these securities will differ from contractual maturities because borrowers may have the right to prepay the underlying loans with or without prepayment penalties.

The following tables present the estimated fair values and gross unrealized losses on available for sale debt securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position as of the periods presented:



	Less than 12 Months				12 Months or More				Total
March 31, 2018	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(Dollars in thousands)
Available for sale debt securities:
U.S. Government agencies and sponsored enterprises obligations	$	54,803	$	945	$	6,104	$	439	$	60,907	$	1,384
U.S. Government agencies and sponsored enterprises mortgage-backed securities	396,538		7,581		167,087		8,038		563,625		15,619
State and municipal obligations	186		7		22,707		1,316		22,893		1,323
Asset-backed securities	115,856		218		—		—		115,856		218
Corporate bonds and other debt securities	357,248		5,356		10,642		261		367,890		5,617
Total available for sale debt securities	$	924,631	$	14,107	$	206,540	$	10,054	$	1,131,171	$	24,161



	Less than 12 Months				12 Months or More				Total
December 31, 2017	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(Dollars in thousands)
Available for sale debt securities: (1)
U.S. Government agencies and sponsored enterprises obligations	$	31,518	$	268	$	7,157	$	403	$	38,675	$	671
U.S. Government agencies and sponsored enterprises mortgage-backed securities	207,735		1,836		175,810		4,953		383,545		6,789
State and municipal obligations	192		2		23,813		717		24,005		719
Asset-backed securities	36,542		100		—		—		36,542		100
Corporate bonds and other debt securities	186,052		1,240		10,842		73		196,894		1,313
Total available for sale debt securities	$	462,039	$	3,446	$	217,622	$	6,146	$	679,661	$	9,592

(1) To allow for improved comparability, prior year presentation has been modified to remove preferred stock and other equity securities in connection with the adoption of ASU 2016-01.

At March 31, 2018, the Company’s security portfolio consisted of 361 securities, of which 204 securities were in an unrealized loss position. A total of 139 were in an unrealized loss position for less than 12 months. The unrealized losses for these securities resulted primarily from changes in interest rates and spreads.

The Company monitors its investment securities for other-than-temporary-impairment ("OTTI"). Impairment is evaluated on an individual security basis considering numerous factors, and their relative significance. The Company has evaluated the nature of unrealized losses in the investment securities portfolio to determine if OTTI exists. The unrealized losses relate to changes in market interest rates and market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell nor is it more likely than not that it will be required to sell these investments before the recovery of their amortized cost basis. Management has completed an assessment of each security in an unrealized loss position for credit impairment and has determined that no individual security was other-than-temporarily impaired at March 31, 2018. The following describes the basis under which the Company has evaluated OTTI:

U.S. Government Agencies and Sponsored Enterprises Obligations and Agency Mortgage-Backed Securities (“MBS”):

The unrealized losses associated with U.S. Government agencies and sponsored enterprises obligations and agency MBS are primarily driven by changes in interest rates. These securities have either an explicit or implicit U.S. government guarantee.

Asset-Backed Securities and Corporate Bonds & Other Debt Securities:

Securities were generally underwritten in accordance with the Company’s investment standards prior to the decision to purchase, without relying on a bond issuer’s guarantee in making the investment decision. These investments were investment grade as of March 31, 2018 and December 31, 2017 and will continue to be monitored as part of the Company’s ongoing impairment analysis, but are expected to perform in accordance with their terms.

Preferred Stock and Other Equity Securities:

The unrealized losses associated with preferred stock and other equity securities in large U.S. financial institutions are primarily driven by changes in interest rates and spreads. These securities were generally underwritten in accordance with the Company’s investment standards prior to the decision to purchase.

Gross realized gains and losses on the sale of available for sale debt securities are shown below. The cost of securities sold is based on the specific identification method.



	Three Months Ended March 31,
	2018			2017
	(Dollars in thousands)
Gross realized gains	$	1		$	325
Gross realized losses	(6		)	—
Net realized gains (losses)	$	(5	)	$	325

The Company adopted ASU 2016-01 as of January 1, 2018. This guidance requires investments in equity securities with readily determinable fair values to be measured at fair value, with changes in the fair value recognized as a component of noninterest income in the Company's Consolidated Statements of Income. The Company recognized $1.6 million of unrealized losses in noninterest income during the three months ended March 31, 2018 related to equity securities still held at the end of the period.