Note 4 – Securities Available for Sale and Held to Maturity

The following tables are a summary of the amortized cost and estimated fair value of securities available for sale and held to maturity at December 31, 2017 and 2016 ($ in thousands):

	Securities Available for Sale									Securities Held to Maturity
			Gross		Gross			Estimated				Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
December 31, 2017	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
U.S. Government agency obligations
Issued by U.S. Government agencies	$	45,508	$	310	$	(800	)	$	45,018	$	—	$	—	$	—		$	—
Issued by U.S. Government sponsored agencies		255		12		—			267		3,692		182		—			3,874
Obligations of states and political subdivisions		78,433		850		(54	)		79,229		46,039		1,044		(59	)		47,024
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		66,634		215		(1,103	)		65,746		13,539		207		(73	)		13,673
Issued by FNMA and FHLMC		824,872		827		(11,249	)		814,450		133,975		210		(1,559	)		132,626
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		1,028,176		1,808		(13,194	)		1,016,790		678,926		1,209		(11,065	)		669,070
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		218,252		426		(1,543	)		217,135		180,315		1,102		(1,437	)		179,980
Total	$	2,262,130	$	4,448	$	(27,943	)	$	2,238,635	$	1,056,486	$	3,954	$	(14,193	)	$	1,046,247

December 31, 2016
U.S. Government agency obligations
Issued by U.S. Government agencies	$	56,272	$	416	$	(925	)	$	55,763	$	—	$	—	$	—		$	—
Issued by U.S. Government sponsored agencies		257		19		—			276		3,647		355		—			4,002
Obligations of states and political subdivisions		113,541		1,945		(113	)		115,373		46,303		1,476		(27	)		47,752
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		43,222		340		(776	)		42,786		15,478		280		(52	)		15,706
Issued by FNMA and FHLMC		638,809		1,773		(9,498	)		631,084		81,299		223		(1,084	)		80,438
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		1,271,198		5,865		(9,112	)		1,267,951		803,474		3,208		(6,519	)		800,163
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		242,869		1,766		(1,186	)		243,449		208,442		1,758		(1,215	)		208,985
Total	$	2,366,168	$	12,124	$	(21,610	)	$	2,356,682	$	1,158,643	$	7,300	$	(8,897	)	$	1,157,046

During 2013, Trustmark reclassified approximately $1.099 billion of securities available for sale to securities held to maturity. The securities were transferred at fair value, which became the cost basis for the securities held to maturity. At the date of transfer, the net unrealized holding loss on the available for sale securities totaled approximately $46.6 million ($28.8 million, net of tax). The net unrealized holding loss is amortized over the remaining life of the securities as a yield adjustment in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security. There were no gains or losses recognized as a result of the transfer. At December 31, 2017, the net unamortized, unrealized loss on the transferred securities included in accumulated other comprehensive loss in the accompanying balance sheet totaled approximately $19.5 million ($12.0 million, net of tax).

Temporarily Impaired Securities

The table below includes securities with gross unrealized losses segregated by length of impairment at December 31, 2017 and 2016 ($ in thousands):

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Estimated		Unrealized			Estimated		Unrealized			Estimated		Unrealized
December 31, 2017	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
U.S. Government agency obligations
Issued by U.S. Government agencies	$	5,214	$	(113	)	$	29,432	$	(687	)	$	34,646	$	(800	)
Obligations of states and political subdivisions		19,345		(80	)		3,874		(33	)		23,219		(113	)
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		37,304		(351	)		29,446		(825	)		66,750		(1,176	)
Issued by FNMA and FHLMC		506,410		(4,219	)		369,060		(8,589	)		875,470		(12,808	)
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		755,013		(7,668	)		534,955		(16,591	)		1,289,968		(24,259	)
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		230,898		(1,719	)		55,288		(1,261	)		286,186		(2,980	)
Total	$	1,554,184	$	(14,150	)	$	1,022,055	$	(27,986	)	$	2,576,239	$	(42,136	)

December 31, 2016
U.S. Government agency obligations
Issued by U.S. Government agencies	$	9,420	$	(142	)	$	33,248	$	(783	)	$	42,668	$	(925	)
Obligations of states and political subdivisions		20,539		(135	)		654		(5	)		21,193		(140	)
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		43,615		(822	)		222		(6	)		43,837		(828	)
Issued by FNMA and FHLMC		588,352		(10,582	)		—		—			588,352		(10,582	)
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		1,127,501		(12,722	)		76,196		(2,909	)		1,203,697		(15,631	)
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		244,050		(2,311	)		4,655		(90	)		248,705		(2,401	)
Total	$	2,033,477	$	(26,714	)	$	114,975	$	(3,793	)	$	2,148,452	$	(30,507	)

The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. Because Trustmark does not intend to sell these securities and it is more likely than not that Trustmark will not be required to sell the investments before recovery of their amortized cost bases, which may be maturity, Trustmark does not consider these investments to be other-than-temporarily impaired at December 31, 2017. There were no other-than-temporary impairments for the years ended December 31, 2017, 2016 and 2015.

Security Gains and Losses

For the periods presented, gains and losses as a result of calls and dispositions of securities, as well as any associated proceeds, were as follows ($ in thousands):

	Years Ended December 31,
Available for Sale	2017			2016			2015
Proceeds from calls and sales of securities	$	27,682		$	24,693		$	—
Gross realized gains		16			32			—
Gross realized losses		(1	)		(342	)		—

Securities Pledged

Securities with a carrying value of $1.834 billion and $1.999 billion at December 31, 2017 and 2016, respectively, were pledged to collateralize public deposits and securities sold under repurchase agreements and for other purposes as permitted by law. At both December 31, 2017 and 2016, none of these securities were pledged under the Federal Reserve Discount Window program to provide additional contingency funding capacity.

Contractual Maturities

The amortized cost and estimated fair value of securities available for sale and held to maturity at December 31, 2017, by contractual maturity, are shown below ($ in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Securities				Securities
	Available for Sale				Held to Maturity
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	31,376	$	31,525	$	155	$	155
Due after one year through five years		57,372		58,343		40,594		41,450
Due after five years through ten years		3,866		3,845		8,982		9,293
Due after ten years		31,582		30,801		—		—
		124,196		124,514		49,731		50,898
Mortgage-backed securities		2,137,934		2,114,121		1,006,755		995,349
Total	$	2,262,130	$	2,238,635	$	1,056,486	$	1,046,247