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, 2016 and December 31, 2015:



	Investment Securities Available-for-Sale
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2016
U.S. Treasury securities	$	5,784	$	17	$	—	$	5,801
Government sponsored agencies	223,917		535		414		224,038
State and political subdivisions	306,196		384		1,043		305,537
Residential mortgage-backed securities	301,194		2,206		2		303,398
Collateralized mortgage obligations	343,502		629		392		343,739
Corporate bonds	96,283		37		235		96,085
Preferred stock and trust preferred securities	24,381		515		113		24,783
Total	$	1,301,257	$	4,323	$	2,199	$	1,303,381
December 31, 2015
U.S. Treasury securities	$	5,773	$	—	$	8	$	5,765
Government sponsored agencies	195,711		78		800		194,989
State and political subdivisions	14,731		395		6		15,120
Residential mortgage-backed securities	189,452		538		2,222		187,768
Collateralized mortgage obligations	133,256		111		1,137		132,230
Corporate bonds	14,825		2		200		14,627
Preferred stock and trust preferred securities	2,888		344		—		3,232
Total	$	556,636	$	1,468	$	4,373	$	553,731



	Investment Securities Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 30, 2016
State and political subdivisions	$	563,221	$	13,110	$	1,487	$	574,844
Trust preferred securities	500		—		200		300
Total	$	563,721	$	13,110	$	1,687	$	575,144
December 31, 2015
State and political subdivisions	$	509,471	$	7,446	$	4,512	$	512,405
Trust preferred securities	500		—		200		300
Total	$	509,971	$	7,446	$	4,712	$	512,705

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).

Proceeds from sales of securities and the associated gains and losses recorded in earnings are listed below:



	For the three months ended September 30,					For the nine months ended September 30,
(Dollars in thousands)	2016			2015		2016			2015
Proceeds	$	2,820		$	8,000	$	7,820		$	37,897
Gross gains	17			5		54			613
Gross losses	(1		)	—		(1		)	(1		)

The following is a summary of the amortized cost and fair value of investment securities at September 30, 2016, 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, 2016
(Dollars in thousands)	Amortized Cost		Fair Value
Investment Securities Available-for-Sale:
Due in one year or less	$	303,733	$	304,279
Due after one year through five years	563,948		565,258
Due after five years through ten years	266,242		266,463
Due after ten years	165,946		165,576
Preferred stock	1,388		1,805
Total	$	1,301,257	$	1,303,381
Investment Securities Held-to-Maturity:
Due in one year or less	$	60,391	$	60,508
Due after one year through five years	276,065		279,172
Due after five years through ten years	138,202		143,257
Due after ten years	89,063		92,207
Total	$	563,721	$	575,144

Securities with a carrying value of $838.0 million and $530.8 million were pledged at September 30, 2016 and December 31, 2015, respectively, to secure borrowings and deposits.

At September 30, 2016 and December 31, 2015, there were no holdings of securities of any one issuer, other than the U.S. government and it's agencies, in an amount greater than 10% of shareholders' equity.

The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at September 30, 2016 and December 31, 2015, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position. As of September 30, 2016, the Corporation’s securities portfolio consisted of 2,473 securities, 598 of which were in an unrealized loss position.



	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2016
Government sponsored agencies	$	20,532	$	29	$	17,546	$	385	$	38,078	$	414
State and political subdivisions	391,355		2,342		29,379		188		420,734		2,530
Residential mortgage-backed securities	10,607		2		8		—		10,615		2
Collateralized mortgage obligations	112,890		230		20,812		162		133,702		392
Corporate bonds	71,912		156		4,921		79		76,833		235
Preferred stock and trust preferred securities	12,131		113		300		200		12,431		313
Total	$	619,427	$	2,872	$	72,966	$	1,014	$	692,393	$	3,886
December 31, 2015
U.S. Treasury securities	$	5,765	$	8	$	—	$	—	$	5,765	$	8
Government sponsored agencies	114,640		292		21,681		508		136,321		800
State and political subdivisions	195,285		2,891		68,361		1,627		263,646		4,518
Residential mortgage-backed securities	169,226		2,146		3,435		76		172,661		2,222
Collateralized mortgage obligations	60,459		408		39,382		729		99,841		1,137
Corporate bonds	9,532		200		—		—		9,532		200
Trust preferred securities	—		—		300		200		300		200
Total	$	554,907	$	5,945	$	133,159	$	3,140	$	688,066	$	9,085

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 reasonably 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, 2016, represented an other-than-temporary impairment (OTTI). Management believed that the unrealized losses on investment securities at September 30, 2016 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, 2016, 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, 2016, 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.