Securities

(In Thousands, Except Number of Securities)

The amortized cost and fair value of securities held to maturity were as follows as of the dates presented:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2015
Obligations of other U.S. Government agencies and corporations	$	125,596	$	19	$	(2,603	)	$	123,012
Obligations of states and political subdivisions	313,474		12,143		(969		)	324,648
	$	439,070	$	12,162	$	(3,572	)	$	447,660
December 31, 2014
Obligations of other U.S. Government agencies and corporations	$	125,081	$	10	$	(2,915	)	$	122,176
Obligations of states and political subdivisions	305,082		15,428		(198		)	320,312
	$	430,163	$	15,438	$	(3,113	)	$	442,488

The amortized cost and fair value of securities available for sale were as follows as of the dates presented:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2015
Obligations of other U.S. Government agencies and corporations	$	6,107	$	142	$	(46	)	$	6,203
Residential mortgage backed securities:
Government agency mortgage backed securities	282,024		3,408		(2,021		)	283,411
Government agency collateralized mortgage obligations	151,403		1,606		(2,498		)	150,511
Commercial mortgage backed securities:
Government agency mortgage backed securities	41,692		1,103		(102		)	42,693
Government agency collateralized mortgage obligations	3,496		169		—			3,665
Trust preferred securities	24,844		—		(5,717		)	19,127
Other debt securities	16,388		445		(52		)	16,781
Other equity securities	2,500		1,329		—			3,829
	$	528,454	$	8,202	$	(10,436	)	$	526,220



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Obligations of other U.S. Government agencies and corporations	$	6,119	$	147	$	(119	)	$	6,147
Residential mortgage backed securities:
Government agency mortgage backed securities	292,283		4,908		(832		)	296,359
Government agency collateralized mortgage obligations	158,436		1,523		(2,523		)	157,436
Commercial mortgage backed securities:
Government agency mortgage backed securities	45,714		1,608		(137		)	47,185
Government agency collateralized mortgage obligations	4,970		202		—			5,172
Trust preferred securities	26,400		137		(6,781		)	19,756
Other debt securities	17,517		487		(74		)	17,930
Other equity securities	2,331		1,268		—			3,599
	$	553,770	$	10,280	$	(10,466	)	$	553,584

Over the past several quarters, pricing on the Company's pooled trust preferred securities has improved such that the amortized cost on one of its securities (XIII) had been fully recovered as of March 31, 2015. As such, during the second quarter of 2015, the Company sold its pooled trust preferred security XIII with net proceeds of $1,213 and a carrying value of $1,117 at the time of sale for a gain of $96. There were no other sales of securities for the three or six months ended June 30, 2015 or 2014.

At June 30, 2015 and December 31, 2014, securities with a carrying value of $634,947 and $617,189, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $18,292 and $16,410 were pledged as collateral for short-term borrowings and derivative instruments at June 30, 2015 and December 31, 2014, respectively.

The amortized cost and fair value of securities at June 30, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.



	Held to Maturity				Available for Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	12,445	$	12,575	$	—	$	—
Due after one year through five years	84,927		87,020		5,055		5,067
Due after five years through ten years	224,633		226,165		1,052		1,136
Due after ten years	117,065		121,900		24,844		19,127
Residential mortgage backed securities:
Government agency mortgage backed securities	—		—		282,024		283,411
Government agency collateralized mortgage obligations	—		—		151,403		150,511
Commercial mortgage backed securities:
Government agency mortgage backed securities	—		—		41,692		42,693
Government agency collateralized mortgage obligations	—		—		3,496		3,665
Other debt securities	—		—		16,388		16,781
Other equity securities	—		—		2,500		3,829
	$	439,070	$	447,660	$	528,454	$	526,220

The following table presents the age of gross unrealized losses and fair value by investment category as of the dates presented:



	Less than 12 Months						12 Months or More						Total
	#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses
Held to Maturity:
June 30, 2015
Obligations of other U.S. Government agencies and corporations	7	$	25,399	$	(586	)	20	$	91,100	$	(2,017	)	27	$	116,499	$	(2,603	)
Obligations of states and political subdivisions	46	39,717		(781		)	6	3,782		(188		)	52	43,499		(969		)
Total	53	$	65,116	$	(1,367	)	26	$	94,882	$	(2,205	)	79	159,998		$	(3,572	)
December 31, 2014
Obligations of other U.S. Government agencies and corporations	2	$	1,000	$	(1	)	26	$	119,174	$	(2,914	)	28	$	120,174	$	(2,915	)
Obligations of states and political subdivisions	3	3,353		(29		)	16	10,052		(169		)	19	13,405		(198		)
Total	5	$	4,353	$	(30	)	42	$	129,226	$	(3,083	)	47	$	133,579	$	(3,113	)
Available for Sale:
June 30, 2015
Obligations of other U.S. Government agencies and corporations	0	$	—	$	—		1	$	3,954	$	(46	)	1	$	3,954	$	(46	)
Residential mortgage backed securities:
Government agency mortgage backed securities	25	102,829		(885		)	9	29,712		(1,136		)	34	132,541		(2,021		)
Government agency collateralized mortgage obligations	5	26,834		(154		)	16	56,483		(2,344		)	21	83,317		(2,498		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	1	4,804		(28		)	2	5,812		(74		)	3	10,616		(102		)
Government agency collateralized mortgage obligations	0	—		—			0	—		—			0	—		—
Trust preferred securities	0	—		—			3	19,127		(5,717		)	3	19,127		(5,717		)
Other debt securities	0	—		—			2	4,040		(52		)	2	4,040		(52		)
Total	31	$	134,467	$	(1,067	)	33	$	119,128	$	(9,369	)	64	$	253,595	$	(10,436	)
December 31, 2014
Obligations of other U.S. Government agencies and corporations	0	$	—	$	—		1	$	3,881	$	(119	)	1	$	3,881	$	(119	)
Residential mortgage backed securities:
Government agency mortgage backed securities	3	18,924		(39		)	13	49,612		(793		)	16	68,536		(832		)
Government agency collateralized mortgage obligations	6	32,169		(138		)	18	65,552		(2,385		)	24	97,721		(2,523		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	0	—		—			3	10,651		(137		)	3	10,651		(137		)
Government agency collateralized mortgage obligations	0	—		—			0	—		—			0	—		—
Trust preferred securities	0	—		—			3	18,503		(6,781		)	3	18,503		(6,781		)
Other debt securities	0	—		—			2	4,175		(74		)	2	4,175		(74		)
Other equity securities	0	—		—			0	—		—			0	—		—
Total	9	$	51,093	$	(177	)	40	$	152,374	$	(10,289	)	49	$	203,467	$	(10,466	)

The Company evaluates its investment portfolio for other-than-temporary-impairment (“OTTI”) on a quarterly basis. Impairment is assessed at the individual security level. The Company considers an investment security impaired if the fair value of the security is less than its cost or amortized cost basis. Impairment is considered to be other-than-temporary if the Company intends to sell the investment security or if the Company does not expect to recover the entire amortized cost basis of the security before the Company is required to sell the security or before the security’s maturity.

The Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be at maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period greater than twelve months, the Company has experienced an overall improvement in the fair value of its investment portfolio on account of the decrease in interest rates from the prior year and, with the exception of one of its pooled trust preferred securities (discussed below) is collecting principal and interest payments from the respective issuers as scheduled. As such, the Company did not record any OTTI for the three or six month period ending June 30, 2015 or 2014.

The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $24,844 and $26,400 and a fair value of $19,127 and $19,756 at June 30, 2015 and December 31, 2014, respectively. At June 30, 2015, the investments in pooled trust preferred securities consist of three securities representing interests in various tranches of trusts collateralized by debt issued by over 260 financial institutions. Management’s determination of the fair value of each of its holdings in pooled trust preferred securities is based on the current credit ratings, the known deferrals and defaults by the underlying issuing financial institutions and the degree to which future deferrals and defaults would be required to occur before the cash flow for the Company’s tranches is negatively impacted. In addition, management continually monitors key credit quality and capital ratios of the issuing institutions. This determination is further supported by quarterly valuations, which are performed by third parties, of each security obtained by the Company. The Company does not intend to sell the investments before recovery of the investments' amortized cost, and it is not more likely than not that the Company will be required to sell the investments before recovery of the investments’ amortized cost, which may be at maturity. At June 30, 2015, management did not, and does not currently, believe such securities will be settled at a price less than the amortized cost of the investment, but the Company previously concluded that it was probable that there had been an adverse change in estimated cash flows for all three trust preferred securities and recognized credit related impairment losses on these securities in 2010 and 2011. No additional impairment was recognized during the six months ended June 30, 2015.

The Company's analysis of the pooled trust preferred securities during the second quarter of 2015 supported a return to accrual status for one of the three securities (XXVI). During the second quarter of 2014, the Company's analysis supported a return to accrual status for one of the other securities (XXIII). An observed history of principal and interest payments combined with improved qualitative and quantitative factors described above justified the accrual of interest on these securities. However, the remaining security (XXIV) is still in "payment in kind" status where interest payments are not expected until a future date and therefore, the qualitative and quantitative factors described above do not justify a return to accrual status at this time. As a result, pooled trust preferred security XXIV remains classified as nonaccruing asset at June 30, 2015, and investment interest is recorded on the cash-basis method until qualifying for return to accrual status.

The following table provides information regarding the Company’s investments in pooled trust preferred securities at June 30, 2015:



Name	Single/ Pooled	Class/ Tranche	Amortized Cost		Fair Value		Unrealized Loss			Lowest Credit Rating	Issuers Currently in Deferral or Default
XXIII	Pooled	B-2	$	8,547	$	6,139	$	(2,408	)	Baa3	17	%
XXIV	Pooled	B-2	12,076		9,963		(2,113		)	Caa2	29	%
XXVI	Pooled	B-2	4,221		3,025		(1,196		)	Ba3	24	%
			$	24,844	$	19,127	$	(5,717	)

The following table provides a summary of the cumulative credit related losses recognized in earnings for which a portion of OTTI has been recognized in other comprehensive income:



	2015			2014
Balance at January 1	$	(3,337	)	$	(3,337	)
Additions related to credit losses for which OTTI was not previously recognized	—			—
Increases in credit loss for which OTTI was previously recognized	—			—
Balance at June 30	$	(3,337	)	$	(3,337	)