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, 2017
Obligations of other U.S. Government agencies and corporations	$	12,602	$	4	$	(137	)	$	12,469
Obligations of states and political subdivisions	335,375		10,299		(927		)	344,747
	$	347,977	$	10,303	$	(1,064	)	$	357,216
December 31, 2016
Obligations of other U.S. Government agencies and corporations	$	14,101	$	4	$	(187	)	$	13,918
Obligations of states and political subdivisions	342,181		8,572		(1,778		)	348,975
	$	356,282	$	8,576	$	(1,965	)	$	362,893

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, 2017
Obligations of other U.S. Government agencies and corporations	$	2,060	$	89	$	—		$	2,149
Residential mortgage backed securities:
Government agency mortgage backed securities	412,710		2,710		(4,165		)	411,255
Government agency collateralized mortgage obligations	192,294		879		(2,787		)	190,386
Commercial mortgage backed securities:
Government agency mortgage backed securities	50,397		777		(302		)	50,872
Government agency collateralized mortgage obligations	1,756		1		(13		)	1,744
Trust preferred securities	22,646		—		(4,823		)	17,823
Other debt securities	22,442		354		(140		)	22,656
	$	704,305	$	4,810	$	(12,230	)	$	696,885



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2016
Obligations of other U.S. Government agencies and corporations	$	2,066	$	92	$	—		$	2,158
Residential mortgage backed securities:
Government agency mortgage backed securities	414,019		1,941		(6,643		)	409,317
Government agency collateralized mortgage obligations	171,362		831		(3,367		)	168,826
Commercial mortgage backed securities:
Government agency mortgage backed securities	50,628		696		(461		)	50,863
Government agency collateralized mortgage obligations	2,528		38		(16		)	2,550
Trust preferred securities	23,749		—		(5,360		)	18,389
Other debt securities	22,053		310		(218		)	22,145
	$	686,405	$	3,908	$	(16,065	)	$	674,248

During the first quarter of 2017, the Company sold residential mortgage backed securities with a carrying value of $2,946 at the time of sale for net proceeds of $2,946 resulting in no gain or loss on the sale. During the same time period in 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.

Gross realized gains on sales of securities available for sale for the three months ended March 31, 2017 and 2016, respectively, were as follows:



	Three Months Ended
	March 31,
	2017		2016
Gross gains on sales of securities available for sale	$	—	$	—
Gross losses on sales of securities available for sale	—		(71		)
Losses on sales of securities available for sale, net	$	—	$	(71	)

At March 31, 2017 and December 31, 2016, securities with a carrying value of $654,378 and $642,447, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $21,466 and $24,426 were pledged as collateral for short-term borrowings and derivative instruments at March 31, 2017 and December 31, 2016, respectively.

The amortized cost and fair value of securities at March 31, 2017 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	$	14,742	$	14,860	$	—	$	—
Due after one year through five years	107,452		110,966		2,060		2,148
Due after five years through ten years	128,319		130,878		2,043		2,071
Due after ten years	97,464		100,512		22,646		17,823
Residential mortgage backed securities:
Government agency mortgage backed securities	—		—		412,710		411,255
Government agency collateralized mortgage obligations	—		—		192,294		190,386
Commercial mortgage backed securities:
Government agency mortgage backed securities	—		—		50,397		50,872
Government agency collateralized mortgage obligations	—		—		1,756		1,744
Other debt securities	—		—		20,399		20,586
	$	347,977	$	357,216	$	704,305	$	696,885

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, 2017
Obligations of other U.S. Government agencies and corporations	4	$	11,965	$	(137	)	0	$	—	$	—		4	$	11,965	$	(137	)
Obligations of states and political subdivisions	53	44,193		(927		)	0	—		—			53	44,193		(927		)
Total	57	$	56,158	$	(1,064	)	0	$	—	$	—		57	56,158		$	(1,064	)
December 31, 2016
Obligations of other U.S. Government agencies and corporations	4	$	11,915	$	(187	)	0	$	—	$	—		4	$	11,915	$	(187	)
Obligations of states and political subdivisions	102	83,362		(1,778		)	0	—		—			102	83,362		(1,778		)
Total	106	$	95,277	$	(1,965	)	0	$	—	$	—		106	$	95,277	$	(1,965	)
Available for Sale:
March 31, 2017
Obligations of other U.S. Government agencies and corporations	0	$	—	$	—		0	$	—	$	—		0	$	—	$	—
Residential mortgage backed securities:
Government agency mortgage backed securities	104	256,655		(3,585		)	8	17,487		(580		)	112	274,142		(4,165		)
Government agency collateralized mortgage obligations	36	106,006		(1,475		)	15	34,769		(1,312		)	51	140,775		(2,787		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	6	15,666		(294		)	2	1,091		(8		)	8	16,757		(302		)
Government agency collateralized mortgage obligations	1	1,723		(13		)	0	—		—			1	1,723		(13		)
Trust preferred securities	0	—		—			3	17,823		(4,823		)	3	17,823		(4,823		)
Other debt securities	2	6,971		(131		)	2	2,410		(9		)	4	9,381		(140		)
Total	149	$	387,021	$	(5,498	)	30	$	73,580	$	(6,732	)	179	$	460,601	$	(12,230	)
December 31, 2016
Obligations of other U.S. Government agencies and corporations	0	$	—	$	—		0	$	—	$	—		0	$	—	$	—
Residential mortgage backed securities:
Government agency mortgage backed securities	131	298,400		(6,042		)	5	11,504		(601		)	136	309,904		(6,643		)
Government agency collateralized mortgage obligations	40	97,356		(1,845		)	14	33,786		(1,522		)	54	131,142		(3,367		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	9	21,933		(453		)	2	1,101		(8		)	11	23,034		(461		)
Government agency collateralized mortgage obligations	1	1,729		(16		)	0	—		—			1	1,729		(16		)
Trust preferred securities	0	—		—			3	18,389		(5,360		)	3	18,389		(5,360		)
Other debt securities	3	7,946		(208		)	2	2,475		(10		)	5	10,421		(218		)
Total	184	$	427,364	$	(8,564	)	26	$	67,255	$	(7,501	)	210	$	494,619	$	(16,065	)

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 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, 2017 or 2016.

The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $22,646 and $23,749 and a fair value of $17,823 and $18,389 at March 31, 2017 and December 31, 2016, respectively. At March 31, 2017, 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, 2017, 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, 2017.

The Company's analysis of the pooled trust preferred securities during prior years has supported a return to accrual status for two of the three securities (XXVI and 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. As to the remaining security (XXIV), the Company only began collecting interest payments on such security during the fourth quarter of 2016 when it exited "payment in kind" status. Therefore, absent an observed history of payments, 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, 2017, 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, 2017:



Name	Single/ Pooled	Class/ Tranche	Amortized Cost		Fair Value		Unrealized Loss			Lowest Credit Rating	Issuers Currently in Deferral or Default
XXIII	Pooled	B-2	$	8,286	$	5,790	$	(2,496	)	Baa3	17	%
XXIV	Pooled	B-2	10,167		8,917		(1,250		)	Caa2	23	%
XXVI	Pooled	B-2	4,193		3,116		(1,077		)	Ba3	19	%
			$	22,646	$	17,823	$	(4,823	)

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:



	2017			2016
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	)