Investment Securities

The following is a summary of the amortized cost and fair value of investment securities available-for-sale and investment securities held-to-maturity at September 30, 2015, December 31, 2014 and September 30, 2014:



	Investment Securities Available-for-Sale
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
September 30, 2015
U.S. Treasury securities	$	6,770	$	34	$	—	$	6,804
Government sponsored agencies	208,626		734		480		208,880
State and political subdivisions	25,573		465		—		26,038
Residential mortgage-backed securities	201,068		944		347		201,665
Collateralized mortgage obligations	149,549		398		570		149,377
Corporate bonds	39,724		68		69		39,723
Preferred stock and trust preferred securities	2,889		265		—		3,154
Total	$	634,199	$	2,908	$	1,466	$	635,641
December 31, 2014
U.S. Treasury securities	$	8,272	$	—	$	13	$	8,259
Government sponsored agencies	263,658		356		511		263,503
State and political subdivisions	45,157		1,087		17		46,227
Residential mortgage-backed securities	240,465		885		1,543		239,807
Collateralized mortgage obligations	145,316		261		1,194		144,383
Corporate bonds	44,930		213		48		45,095
Preferred stock	1,389		201		—		1,590
Total	$	749,187	$	3,003	$	3,326	$	748,864
September 30, 2014
Government sponsored agencies	$	76,626	$	354	$	42	$	76,938
State and political subdivisions	39,589		1,375		—		40,964
Residential mortgage-backed securities	252,908		846		2,715		251,039
Collateralized mortgage obligations	141,273		346		1,174		140,445
Corporate bonds	64,955		295		67		65,183
Preferred stock	1,389		253		—		1,642
Total	$	576,740	$	3,469	$	3,998	$	576,211



	Investment Securities Held-to-Maturity
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
September 30, 2015
State and political subdivisions	$	500,583	$	6,038	$	7,017	$	499,604
Trust preferred securities	500		—		200		300
Total	$	501,083	$	6,038	$	7,217	$	499,904
December 31, 2014
State and political subdivisions	$	305,913	$	7,294	$	4,557	$	308,650
Trust preferred securities	10,500		—		3,410		7,090
Total	$	316,413	$	7,294	$	7,967	$	315,740
September 30, 2014
State and political subdivisions	$	308,062	$	5,704	$	6,476	$	307,290
Trust preferred securities	10,500		—		3,515		6,985
Total	$	318,562	$	5,704	$	9,991	$	314,275

The majority of the Corporation’s residential mortgage-backed securities and collateralized mortgage obligations are backed by a U.S. government agency (Government National Mortgage Association) or a government sponsored enterprise (Federal Home Loan Mortgage Corporation or Federal National Mortgage Association).

As of December 31, 2014 and September 30, 2014, the Corporation held a $10.0 million trust preferred investment security of Lake Michigan. With the acquisition of Lake Michigan, this investment was settled as of the acquisition date at par.

The following is a summary of the amortized cost and fair value of investment securities at September 30, 2015, by maturity, for both available-for-sale and held-to-maturity investment securities. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity.



	September 30, 2015
	Amortized Cost		Fair Value
	(In thousands)
Investment Securities Available-for-Sale:
Due in one year or less	$	200,319	$	200,435
Due after one year through five years	367,920		368,761
Due after five years through ten years	59,327		59,521
Due after ten years	5,244		5,270
Preferred stock	1,389		1,654
Total	$	634,199	$	635,641
Investment Securities Held-to-Maturity:
Due in one year or less	$	56,508	$	56,614
Due after one year through five years	229,324		229,045
Due after five years through ten years	135,569		134,841
Due after ten years	79,682		79,404
Total	$	501,083	$	499,904

The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at September 30, 2015, December 31, 2014 and September 30, 2014, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position.



	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
September 30, 2015
Government sponsored agencies	$	13,703	$	349	$	13,275	$	131	$	26,978	$	480
State and political subdivisions	208,376		4,762		66,505		2,255		274,881		7,017
Residential mortgage-backed securities	133,975		293		3,567		54		137,542		347
Collateralized mortgage obligations	27,643		36		44,062		534		71,705		570
Corporate bonds	9,664		61		14,992		8		24,656		69
Trust preferred securities	—		—		300		200		300		200
Total	$	393,361	$	5,501	$	142,701	$	3,182	$	536,062	$	8,683
December 31, 2014
U.S. Treasury securities	$	8,259	$	13	$	—	$	—	$	8,259	$	13
Government sponsored agencies	166,963		406		31,927		105		198,890		511
State and political subdivisions	62,310		3,348		36,847		1,226		99,157		4,574
Residential mortgage-backed securities	17,276		52		180,194		1,491		197,470		1,543
Collateralized mortgage obligations	63,077		179		31,620		1,015		94,697		1,194
Corporate bonds	—		—		14,952		48		14,952		48
Trust preferred securities	—		—		7,090		3,410		7,090		3,410
Total	$	317,885	$	3,998	$	302,630	$	7,295	$	620,515	$	11,293
September 30, 2014
Government sponsored agencies	$	1,744	$	4	$	24,810	$	38	$	26,554	$	42
State and political subdivisions	91,532		4,010		70,116		2,466		161,648		6,476
Residential mortgage-backed securities	34,280		144		196,045		2,571		230,325		2,715
Collateralized mortgage obligations	44,195		81		28,544		1,093		72,739		1,174
Corporate bonds	4,996		4		14,937		63		19,933		67
Trust preferred securities	—		—		6,985		3,515		6,985		3,515
Total	$	176,747	$	4,243	$	341,437	$	9,746	$	518,184	$	13,989

An assessment is performed quarterly by the Corporation to determine whether unrealized losses in its investment securities portfolio are temporary or other-than-temporary by carefully considering all available information. The Corporation reviews factors such as financial statements, credit ratings, news releases and other pertinent information of the underlying issuer or company to make its determination. Management did not believe any individual unrealized loss on any investment security, as of September 30, 2015, represented an other-than-temporary impairment (OTTI). Management believed that the unrealized losses on investment securities at September 30, 2015 were temporary in nature and due primarily to changes in interest rates and reduced market liquidity and not as a result of credit-related issues.

At September 30, 2015, the Corporation did not have the intent to sell any of its impaired investment securities and believed that it was more-likely-than-not that the Corporation will not have to sell any such investment securities before a full recovery of amortized cost. Accordingly, at September 30, 2015, the Corporation believed the impairments in its investment securities portfolio were temporary in nature. However, there is no assurance that OTTI may not occur in the future.