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
March 31, 2016
Obligations of other U.S. Government agencies and corporations	$	93,498	$	58	$	(505	)	$	93,051
Obligations of states and political subdivisions	354,878		18,150		(19		)	373,009
	$	448,376	$	18,208	$	(524	)	$	466,060
December 31, 2015
Obligations of other U.S. Government agencies and corporations	$	101,155	$	26	$	(1,214	)	$	99,967
Obligations of states and political subdivisions	357,245		16,636		(95		)	373,786
	$	458,400	$	16,662	$	(1,309	)	$	473,753

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
March 31, 2016
Obligations of other U.S. Government agencies and corporations	$	6,087	$	140	$	(10	)	$	6,217
Residential mortgage backed securities:
Government agency mortgage backed securities	357,942		5,703		(573		)	363,072
Government agency collateralized mortgage obligations	179,764		2,205		(1,061		)	180,908
Commercial mortgage backed securities:
Government agency mortgage backed securities	55,574		1,596		(35		)	57,135
Government agency collateralized mortgage obligations	4,839		209		—			5,048
Trust preferred securities	24,732		—		(5,785		)	18,947
Other debt securities	17,873		575		(22		)	18,426
Other equity securities	2,426		1,265		—			3,691
	$	649,237	$	11,693	$	(7,486	)	$	653,444



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2015
Obligations of other U.S. Government agencies and corporations	$	6,093	$	126	$	(19	)	$	6,200
Residential mortgage backed securities:
Government agency mortgage backed securities	362,669		3,649		(1,778		)	364,540
Government agency collateralized mortgage obligations	168,916		1,449		(2,305		)	168,060
Commercial mortgage backed securities:
Government agency mortgage backed securities	58,864		1,002		(107		)	59,759
Government agency collateralized mortgage obligations	4,947		158		(1		)	5,104
Trust preferred securities	24,770		—		(5,301		)	19,469
Other debt securities	18,899		468		(34		)	19,333
Other equity securities	2,500		1,840		—			4,340
	$	647,658	$	8,692	$	(9,545	)	$	646,805

During the three months ended March 31, 2016, the Company sold an "other equity security" with a carrying value of $75 at the time of sale for net proceeds of $4 resulting in a loss of $71. During the same period in 2015, there were no securities sold.

Gross realized gains on sales of securities available for sale for the three months ended March 31, 2016 and 2015 were as follows:



	Three Months Ended
	March 31,
	2016			2015
Gross gains on sales of securities available for sale	$	—		$	—
Gross losses on sales of securities available for sale	(71		)	—
Loss on sales of securities available for sale, net	$	(71	)	$	—

At March 31, 2016 and December 31, 2015, securities with a carrying value of $703,158 and $679,492, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $40,755 and $39,275 were pledged as collateral for short-term borrowings and derivative instruments at March 31, 2016 and December 31, 2015, respectively.

The amortized cost and fair value of securities at March 31, 2016 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	$	19,610	$	19,780	$	—	$	—
Due after one year through five years	106,455		109,612		6,087		6,217
Due after five years through ten years	199,168		206,350		—		—
Due after ten years	123,143		130,318		24,732		18,947
Residential mortgage backed securities:
Government agency mortgage backed securities	—		—		357,942		363,072
Government agency collateralized mortgage obligations	—		—		179,764		180,908
Commercial mortgage backed securities:
Government agency mortgage backed securities	—		—		55,574		57,135
Government agency collateralized mortgage obligations	—		—		4,839		5,048
Other debt securities	—		—		17,873		18,426
Other equity securities	—		—		2,426		3,691
	$	448,376	$	466,060	$	649,237	$	653,444

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:
March 31, 2016
Obligations of other U.S. Government agencies and corporations	10	$	40,832	$	(264	)	5	$	24,745	$	(241	)	15	$	65,577	$	(505	)
Obligations of states and political subdivisions	9	8,604		(17		)	2	822		(2		)	11	9,426		(19		)
Total	19	$	49,436	$	(281	)	7	$	25,567	$	(243	)	26	75,003		$	(524	)
December 31, 2015
Obligations of other U.S. Government agencies and corporations	10	$	31,567	$	(414	)	8	$	38,688	$	(800	)	18	$	70,255	$	(1,214	)
Obligations of states and political subdivisions	6	4,815		(53		)	7	4,921		(42		)	13	9,736		(95		)
Total	16	$	36,382	$	(467	)	15	$	43,609	$	(842	)	31	$	79,991	$	(1,309	)
Available for Sale:
March 31, 2016
Obligations of other U.S. Government agencies and corporations	1	$	3,990	$	(10	)	0	$	—	$	—		1	$	3,990	$	(10	)
Residential mortgage backed securities:
Government agency mortgage backed securities	10	31,374		(136		)	7	19,176		(437		)	17	50,550		(573		)
Government agency collateralized mortgage obligations	11	34,635		(115		)	13	39,797		(946		)	24	74,432		(1,061		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	4	6,874		(33		)	1	808		(2		)	5	7,682		(35		)
Government agency collateralized mortgage obligations	0	—		—			0	—		—			0	—		—
Trust preferred securities	0	—		—			3	18,946		(5,785		)	3	18,946		(5,785		)
Other debt securities	2	3,637		(13		)	1	1,398		(9		)	3	5,035		(22		)
Total	28	$	80,510	$	(307	)	25	$	80,125	$	(7,179	)	53	$	160,635	$	(7,486	)
December 31, 2015
Obligations of other U.S. Government agencies and corporations	1	$	3,981	$	(19	)	0	$	—	$	—		1	$	3,981	$	(19	)
Residential mortgage backed securities:
Government agency mortgage backed securities	34	130,306		(937		)	9	27,431		(841		)	43	157,737		(1,778		)
Government agency collateralized mortgage obligations	25	52,128		(347		)	16	51,574		(1,958		)	41	103,702		(2,305		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	8	16,782		(104		)	1	814		(3		)	9	17,596		(107		)
Government agency collateralized mortgage obligations	1	1,882		(1		)	0	—		—			1	1,882		(1		)
Trust preferred securities	0	—		—			3	19,469		(5,301		)	3	19,469		(5,301		)
Other debt securities	1	1,316		(3		)	2	3,866		(31		)	3	5,182		(34		)
Other equity securities	0	—		—			0	—		—			0	—		—
Total	70	$	206,395	$	(1,411	)	31	$	103,154	$	(8,134	)	101	$	309,549	$	(9,545	)

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 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 months ended March 31, 2016 or 2015.

The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $24,732 and $24,770 and a fair value of $18,947 and $19,469 at March 31, 2016 and December 31, 2015, respectively. At March 31, 2016, the investments in pooled trust preferred securities consisted 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 March 31, 2016, 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 three months ended March 31, 2016.

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 a nonaccruing asset at March 31, 2016, 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 March 31, 2016:



Name	Single/ Pooled	Class/ Tranche	Amortized Cost		Fair Value		Unrealized Loss			Lowest Credit Rating	Issuers Currently in Deferral or Default
XXIII	Pooled	B-2	$	8,434	$	5,743	$	(2,691	)	Baa3	19	%
XXIV	Pooled	B-2	12,077		10,193		(1,884		)	Caa2	28	%
XXVI	Pooled	B-2	4,221		3,011		(1,210		)	Ba3	25	%
			$	24,732	$	18,947	$	(5,785	)

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:



	2016			2015
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 March 31	$	(3,337	)	$	(3,337	)