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Securities
 9 Months Ended
Sep. 30, 2017
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, 2017
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
—

 
$
—

 
$
—

 
$
—

Obligations of states and political subdivisions
—

 
—

 
—

 
—

 
$
—

 
$
—

 
$
—

 
$
—

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




In light of the ongoing fiscal uncertainty in many state and local governments, and the fact that the Company’s held to maturity portfolio consisted primarily of municipal securities, the Company analyzes its exposure to potential losses in its security portfolio on at least a quarterly basis. Management reviews the underlying credit rating and analyzes the financial condition of the respective issuers. Although the Company’s analysis of its securities portfolio in the third quarter of 2017 showed that the municipal securities held by the Company had not experienced significant deterioration as of the date of such analysis, the Company transferred all held to maturity securities to available for sale during the third quarter of 2017. This transfer gives management the flexibility to quickly liquidate any municipal securities should further analysis reveal more significant deterioration than has been experienced to date. At the date of transfer, the securities transferred had a carrying value of $365,941, which includes an unrealized gain of $13,218. At transfer, the unrealized gain was included in the carrying value of the securities portfolio and in accumulated other comprehensive loss presented in the Consolidated Balance Sheet.


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, 2017
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
14,648

 
$
74

 
$
(84
)
 
$
14,638

Obligations of states and political subdivisions
337,725

 
12,787

 
(158
)
 
350,354

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
459,336

 
2,876

 
(2,654
)
 
459,558

Government agency collateralized mortgage obligations
234,224

 
764

 
(2,330
)
 
232,658

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
45,340

 
762

 
(173
)
 
45,929

Government agency collateralized mortgage obligations
11,354

 
89

 
—

 
11,443

Trust preferred securities
12,454

 
—

 
(3,494
)
 
8,960

Other debt securities
26,546

 
429

 
(56
)
 
26,919

 
$
1,141,627

 
$
17,781

 
$
(8,949
)
 
$
1,150,459

 
 
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 third quarter of 2017, the Company sold one of its pooled trust preferred securities (XXIV) with a carrying value of $9,346 at the time of sale for net proceeds of $9,403 resulting in a gain of $57 on the sale. The Company also sold certain securities acquired in connection with its acquisition of Metropolitan. These included $14,750 in mortgage backed securities and $16,395 in collateralized mortgage obligations, which were classified as available for sale, and $4,876 in obligations of states and political subdivisions, which were classified as held to maturity. These securities were sold at carrying value and did not result in a gain or loss. During the first nine months of 2017, the Company also 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 first nine 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 and losses on sales of securities available for sale for the three and nine months ended September 30, 2017 and 2016, respectively, were as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2017
 
2016
 
2017
 
2016
Gross gains on sales of securities available for sale
$
57

 
$
—

 
$
57

 
$
1,257

Gross losses on sales of securities available for sale
—

 
—

 
—

 
(71
)
Gains on sales of securities available for sale, net
$
57

 
$
—

 
$
57

 
$
1,186



At September 30, 2017 and December 31, 2016, securities with a carrying value of $459,369 and $642,447, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $27,164 and $24,426 were pledged as collateral for short-term borrowings and derivative instruments at September 30, 2017 and December 31, 2016, respectively.
The amortized cost and fair value of securities at September 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.
 
 
Available for Sale
 
Amortized
Cost
 
Fair
Value
Due within one year
$
23,491

 
$
23,798

Due after one year through five years
106,577

 
110,274

Due after five years through ten years
147,761

 
153,199

Due after ten years
94,150

 
93,983

Residential mortgage backed securities:
 
 
 
Government agency mortgage backed securities
459,336

 
459,558

Government agency collateralized mortgage obligations
234,224

 
232,658

Commercial mortgage backed securities:
 
 
 
Government agency mortgage backed securities
45,340

 
45,929

Government agency collateralized mortgage obligations
11,354

 
11,443

Other debt securities
19,394

 
19,617

 
$
1,141,627

 
$
1,150,459





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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
4
 
$
12,018

 
$
(84
)
 
0
 
$
—

 
$
—

 
4
 
$
12,018

 
$
(84
)
Obligations of states and political subdivisions

16
 
11,248

 
(105
)
 
3
 
2,037

 
(53
)
 
19
 
13,285

 
(158
)
Residential mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
97
 
249,318

 
(1,902
)
 
12
 
31,392

 
(752
)
 
109
 
280,710

 
(2,654
)
Government agency collateralized mortgage obligations
34
 
126,612

 
(974
)
 
19
 
44,790

 
(1,356
)
 
53
 
171,402

 
(2,330
)
Commercial mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
4
 
9,906

 
(25
)
 
3
 
5,978

 
(148
)
 
7
 
15,884

 
(173
)
Government agency collateralized mortgage obligations
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Trust preferred securities
0
 
—

 
—

 
2
 
8,960

 
(3,494
)
 
2
 
8,960

 
(3,494
)
Other debt securities
5
 
9,105

 
(48
)
 
1
 
1,205

 
(8
)
 
6
 
10,310

 
(56
)
Total
160
 
$
418,207

 
$
(3,138
)
 
40
 
$
94,362

 
$
(5,811
)
 
200
 
$
512,569

 
$
(8,949
)
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 securities in an unrealized loss position that it holds, 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 nine months ended September 30, 2017 or 2016.
The Company holds investments in pooled trust preferred securities that had an amortized cost basis of $12,454 and $23,749 and a fair value of $8,960 and $18,389 at September 30, 2017 and December 31, 2016, respectively. At September 30, 2017, the investments in pooled trust preferred securities consisted of two securities representing interests in various tranches of trusts collateralized by debt issued by over 160 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, 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 both trust preferred securities and recognized credit related impairment losses on these securities in 2011. No additional impairment was recognized during the nine months ended September 30, 2017.
The following table provides information regarding the Company’s investments in pooled trust preferred securities at September 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
 
$
8,302

 
$
5,813

 
$
(2,489
)
 
A1
 
15
%
XXVI
Pooled
 
B-2
 
4,152

 
3,147

 
(1,005
)
 
Ba3
 
19
%
 
 
 
 
 
$
12,454

 
$
8,960

 
$
(3,494
)
 
 
 
 


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
—

 
—

Reductions for securities sold during the period
$
3,076

 
$
—

Balance at September 30
$
(261
)
 
$
(3,337
)