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Securities
 6 Months Ended
Jun. 30, 2016
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
June 30, 2016
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
34,093

 
$
49

 
$
(15
)
 
$
34,127

Obligations of states and political subdivisions
355,052

 
20,595

 
(6
)
 
375,641

 
$
389,145

 
$
20,644

 
$
(21
)
 
$
409,768

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
June 30, 2016
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
2,080

 
$
140

 
$
—

 
$
2,220

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
401,861

 
6,757

 
(314
)
 
408,304

Government agency collateralized mortgage obligations
166,616

 
2,301

 
(870
)
 
168,047

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
52,975

 
1,952

 
(29
)
 
54,898

Government agency collateralized mortgage obligations
4,378

 
260

 
—

 
4,638

Trust preferred securities
24,675

 
—

 
(6,496
)
 
18,179

Other debt securities
17,587

 
583

 
(9
)
 
18,161

Other equity securities
—

 
—

 
—

 
—

 
$
670,172

 
$
11,993

 
$
(7,718
)
 
$
674,447

 
 
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 second quarter of 2016, the Company sold an "other equity security" with a carrying value of $2,767 at the time of sale for net proceeds of $4,024 resulting in a gain of $1,257. Additionally, during the first quarter of 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 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.



Gross realized gains on sales of securities available for sale for the three and six months ended June 30, 2016 and 2015 were as follows:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2016
 
2015
 
2016
 
2015
Gross gains on sales of securities available for sale
$
1,257

 
$
96

 
$
1,257

 
$
96

Gross losses on sales of securities available for sale
—

 
—

 
(71
)
 
—

Gains on sales of securities available for sale, net
$
1,257

 
$
96

 
$
1,186

 
$
96



At June 30, 2016 and December 31, 2015, securities with a carrying value of $681,940 and $679,492, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $35,124 and $39,275 were pledged as collateral for short-term borrowings and derivative instruments at June 30, 2016 and December 31, 2015, respectively.
The amortized cost and fair value of securities at June 30, 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
$
18,252

 
$
18,408

 
$
—

 
$
—

Due after one year through five years
97,438

 
101,466

 
2,080

 
2,220

Due after five years through ten years
155,513

 
164,074

 
—

 
—

Due after ten years
117,942

 
125,820

 
24,675

 
18,179

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
—

 
—

 
401,861

 
408,304

Government agency collateralized mortgage obligations
—

 
—

 
166,616

 
168,047

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
—

 
—

 
52,975

 
54,898

Government agency collateralized mortgage obligations
—

 
—

 
4,378

 
4,638

Other debt securities
—

 
—

 
17,587

 
18,161

Other equity securities
—

 
—

 
—

 
—

 
$
389,145

 
$
409,768

 
$
670,172

 
$
674,447





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, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
1
 
$
4,997

 
$
(3
)
 
2
 
$
9,981

 
$
(12
)
 
3
 
$
14,978

 
$
(15
)
Obligations of states and political subdivisions
2
 
530

 
(6
)
 
0
 
—

 
—

 
2
 
530

 
(6
)
Total
3
 
$
5,527

 
$
(9
)
 
2
 
$
9,981

 
$
(12
)
 
5
 
15,508

 
$
(21
)
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
0
 
$
—

 
$
—

 
0
 
$
—

 
$
—

 
0
 
$
—

 
$
—

Residential mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
10
 
17,767

 
(52
)
 
7
 
18,526

 
(262
)
 
17
 
36,293

 
(314
)
Government agency collateralized mortgage obligations
8
 
23,540

 
(159
)
 
13
 
38,135

 
(711
)
 
21
 
61,675

 
(870
)
Commercial mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
4
 
6,120

 
(29
)
 
0
 
—

 
—

 
4
 
6,120

 
(29
)
Government agency collateralized mortgage obligations
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Trust preferred securities
0
 
—

 
—

 
3
 
18,179

 
(6,496
)
 
3
 
18,179

 
(6,496
)
Other debt securities
2
 
3,425

 
(3
)
 
1
 
1,354

 
(6
)
 
3
 
4,779

 
(9
)
Total
24
 
$
50,852

 
$
(243
)
 
24
 
$
76,194

 
$
(7,475
)
 
48
 
$
127,046

 
$
(7,718
)
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 or six months ended June 30, 2016 or 2015.
The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $24,675 and $24,770 and a fair value of $18,179 and $19,469 at June 30, 2016 and December 31, 2015, respectively. At June 30, 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 June 30, 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 six months ended June 30, 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 June 30, 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 June 30, 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
 
$
8,377

 
$
5,621

 
$
(2,756
)
 
Baa3
 
17
%
XXIV
Pooled
 
B-2
 
12,077

 
9,578

 
(2,499
)
 
Caa2
 
28
%
XXVI
Pooled
 
B-2
 
4,221

 
2,980

 
(1,241
)
 
Ba3
 
25
%
 
 
 
 
 
$
24,675

 
$
18,179

 
$
(6,496
)
 
 
 
 


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 June 30
$
(3,337
)
 
$
(3,337
)