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, 2017
Obligations of other U.S. Government agencies and corporations	$	12,602	$	6	$	(77	)	$	12,531
Obligations of states and political subdivisions	327,017		13,657		(141		)	340,533
	$	339,619	$	13,663	$	(218	)	$	353,064
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
June 30, 2017
Obligations of other U.S. Government agencies and corporations	$	2,053	$	81	$	—		$	2,134
Residential mortgage backed securities:
Government agency mortgage backed securities	419,848		3,317		(2,288		)	420,877
Government agency collateralized mortgage obligations	222,110		1,133		(1,948		)	221,295
Commercial mortgage backed securities:
Government agency mortgage backed securities	50,167		1,032		(146		)	51,053
Government agency collateralized mortgage obligations	1,746		8		—			1,754
Trust preferred securities	21,793		—		(4,801		)	16,992
Other debt securities	22,519		427		(45		)	22,901
	$	740,236	$	5,998	$	(9,228	)	$	737,006



	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. There were no securities sold during the second quarter of 2017. During the first six months of 2016, the Company sold "other equity" securities with a carrying value of $2,842 at the time of sale for net proceeds of $4,028 resulting in a net gain of $1,186.

Gross realized gains on sales of securities available for sale for the three and six months ended June 30, 2017 and 2016, respectively, were as follows:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Gross gains on sales of securities available for sale	$	—	$	1,257	$	—	$	1,257
Gross losses on sales of securities available for sale	—		—		—		(71		)
Gains on sales of securities available for sale, net	$	—	$	1,257	$	—	$	1,186

At June 30, 2017 and December 31, 2016, securities with a carrying value of $349,741 and $642,447, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $21,163 and $24,426 were pledged as collateral for short-term borrowings and derivative instruments at June 30, 2017 and December 31, 2016, respectively.

The amortized cost and fair value of securities at June 30, 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	$	14,605	$	14,735	$	—	$	—
Due after one year through five years	108,014		111,811		2,053		2,134
Due after five years through ten years	129,897		135,500		3,040		3,116
Due after ten years	87,103		91,018		21,793		16,992
Residential mortgage backed securities:
Government agency mortgage backed securities	—		—		419,848		420,877
Government agency collateralized mortgage obligations	—		—		222,110		221,295
Commercial mortgage backed securities:
Government agency mortgage backed securities	—		—		50,167		51,053
Government agency collateralized mortgage obligations	—		—		1,746		1,754
Other debt securities	—		—		19,479		19,785
	$	339,619	$	353,064	$	740,236	$	737,006

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, 2017
Obligations of other U.S. Government agencies and corporations	4	$	12,025	$	(77	)	0	$	—	$	—		4	$	12,025	$	(77	)
Obligations of states and political subdivisions	17	11,846		(136		)	2	523		(5		)	19	12,369		(141		)
Total	21	$	23,871	$	(213	)	2	$	523	$	(5	)	23	24,394		$	(218	)
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:
June 30, 2017
Obligations of other U.S. Government agencies and corporations	0	$	—	$	—		0	$	—	$	—		0	$	—	$	—
Residential mortgage backed securities:
Government agency mortgage backed securities	89	213,161		(1,911		)	8	16,818		(377		)	97	229,979		(2,288		)
Government agency collateralized mortgage obligations	29	94,314		(911		)	16	36,107		(1,037		)	45	130,421		(1,948		)
Commercial mortgage backed securities:
Government agency mortgage backed securities	3	7,862		(138		)	2	1,082		(8		)	5	8,944		(146		)
Government agency collateralized mortgage obligations	0	—		—			0	—		—			0	—		—
Trust preferred securities	0	—		—			3	16,992		(4,801		)	3	16,992		(4,801		)
Other debt securities	2	6,658		(38		)	1	1,205		(7		)	3	7,863		(45		)
Total	123	$	321,995	$	(2,998	)	30	$	72,204	$	(6,230	)	153	$	394,199	$	(9,228	)
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 or six months ended June 30, 2017 or 2016.

The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $21,793 and $23,749 and a fair value of $16,992 and $18,389 at June 30, 2017 and December 31, 2016, respectively. At June 30, 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 June 30, 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 six months ended June 30, 2017.

The Company's analysis of the pooled trust preferred securities during the second quarter of 2017 supported a return to accrual status for the last remaining security (XXIV), which had been in "payment in kind" status until December 2016. An observed history of principal and interest payments combined with improved qualitative and quantitative factors described above justified the accrual of interest on this security. The Company had in previous years placed the other two pooled trust preferred securities (XXIII and XXVI) back on accrual status.

The following table provides information regarding the Company’s investments in pooled trust preferred securities at June 30, 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	$	8,293	$	5,788	$	(2,505	)	Baa3	16	%
XXIV	Pooled	B-2	9,327		8,078		(1,249		)	Ba1	22	%
XXVI	Pooled	B-2	4,173		3,126		(1,047		)	Ba3	19	%
			$	21,793	$	16,992	$	(4,801	)

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 June 30	$	(3,337	)	$	(3,337	)