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Securities
 9 Months Ended
Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract]  
Securities
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
September 30, 2015
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
120,602

 
$
32

 
$
(883
)
 
$
119,751

Obligations of states and political subdivisions
356,150

 
14,742

 
(410
)
 
370,482

 
$
476,752

 
$
14,774

 
$
(1,293
)
 
$
490,233

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
September 30, 2015
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
6,100

 
$
150

 
$
(2
)
 
$
6,248

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
362,702

 
5,740

 
(892
)
 
367,550

Government agency collateralized mortgage obligations
178,546

 
2,422

 
(1,542
)
 
179,426

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
59,544

 
1,623

 
(14
)
 
61,153

Government agency collateralized mortgage obligations
5,211

 
237

 
—

 
5,448

Trust preferred securities
24,807

 
—

 
(5,917
)
 
18,890

Other debt securities
19,607

 
548

 
(20
)
 
20,135

Other equity securities
2,500

 
1,451

 
—

 
3,951

 
$
659,017

 
$
12,171

 
$
(8,387
)
 
$
662,801

 
 
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



During the nine months ended September 30, 2015, the Company sold its pooled trust preferred security XIII with a carrying value of $1,117 at the time of sale for net proceeds of $1,213 resulting in a gain of $96. Furthermore, the Company sold certain investments acquired from Heritage shortly after acquisition with an aggregate carrying value of $7,231 at the time of sale for net proceeds of $7,231, resulting in no gain or loss on the sale. During the same period in 2014, the Company sold securities with a carrying value of $724 at the time of sale for net proceeds of $1,099 resulting in a gain of $375.

Gross realized gains on sales of securities available for sale for the three and nine months ended September 30, 2015 and 2014 were as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Gross gains on sales of securities available for sale
$
—

 
$
375

 
$
96

 
$
375

Gross losses on sales of securities available for sale
—

 
—

 
—

 
—

Gain on sales of securities available for sale, net
$
—

 
$
375

 
$
96

 
$
375



At September 30, 2015 and December 31, 2014, securities with a carrying value of $721,834 and $617,189, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $37,976 and $16,410 were pledged as collateral for short-term borrowings and derivative instruments at September 30, 2015 and December 31, 2014, respectively.
The amortized cost and fair value of securities at September 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
$
15,035

 
$
15,227

 
$
—

 
$
—

Due after one year through five years
86,835

 
89,467

 
6,100

 
6,248

Due after five years through ten years
237,759

 
242,027

 
—

 
—

Due after ten years
137,123

 
143,512

 
24,807

 
18,890

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
—

 
—

 
362,702

 
367,550

Government agency collateralized mortgage obligations
—

 
—

 
178,546

 
179,426

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
—

 
—

 
59,544

 
61,153

Government agency collateralized mortgage obligations
—

 
—

 
5,211

 
5,448

Other debt securities
—

 
—

 
19,607

 
20,135

Other equity securities
—

 
—

 
2,500

 
3,951

 
$
476,752

 
$
490,233

 
$
659,017

 
$
662,801



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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
11
 
$
45,255

 
$
(230
)
 
12
 
$
55,050

 
$
(653
)
 
23
 
$
100,305

 
$
(883
)
Obligations of states and political subdivisions
35
 
26,941

 
(305
)
 
6
 
3,861

 
(105
)
 
41
 
30,802

 
(410
)
Total
46
 
$
72,196

 
$
(535
)
 
18
 
$
58,911

 
$
(758
)
 
64
 
131,107

 
$
(1,293
)
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
1
 
$
3,998

 
$
(2
)
 
0
 
$
—

 
$
—

 
1
 
$
3,998

 
$
(2
)
Residential mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
14
 
51,459

 
(184
)
 
9
 
28,867

 
(708
)
 
23
 
80,326

 
(892
)
Government agency collateralized mortgage obligations
3
 
6,995

 
(35
)
 
16
 
54,514

 
(1,507
)
 
19
 
61,509

 
(1,542
)
Commercial mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
2
 
1,144

 
(11
)
 
1
 
820

 
(3
)
 
3
 
1,964

 
(14
)
Government agency collateralized mortgage obligations
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Trust preferred securities
0
 
—

 
—

 
3
 
18,890

 
(5,917
)
 
3
 
18,890

 
(5,917
)
Other debt securities
0
 
—

 
—

 
2
 
4,051

 
(20
)
 
2
 
4,051

 
(20
)
Total
20
 
$
63,596

 
$
(232
)
 
31
 
$
107,142

 
$
(8,155
)
 
51
 
$
170,738

 
$
(8,387
)
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 nine months ended September 30, 2015 or 2014.
The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $24,807 and $26,400 and a fair value of $18,890 and $19,756 at September 30, 2015 and December 31, 2014, respectively. At September 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 250 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 September 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 nine months ended September 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 September 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 September 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
 
$
8,510

 
$
5,882

 
$
(2,628
)
 
Baa3
 
18
%
XXIV
Pooled
 
B-2
 
12,076

 
9,963

 
(2,113
)
 
Caa2
 
31
%
XXVI
Pooled
 
B-2
 
4,221

 
3,045

 
(1,176
)
 
Ba3
 
26
%
 
 
 
 
 
$
24,807

 
$
18,890

 
$
(5,917
)
 
 
 
 


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 September 30
$
(3,337
)
 
$
(3,337
)