Note D - Securities

The amortized cost and fair value of securities available for sale and held to maturity at December 31, 2017 and December 31, 2016 are summarized as follows:

	December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	9,475	$	274	$	(5)	$	9,744
Mortgage-backed securities of U.S. Government Sponsored Entities		318,771		891		(3,306)		316,356
Collateralized mortgage obligations of U.S. Government Sponsored Entities		235,466		272		(4,694)		231,044
Commercial mortgage backed securities of U.S. Government Sponsored Entities		16,210		165		(34)		16,341
Private mortgage backed securities		18,056		384		0		18,440
Private collateralized mortgage obligations		47,045		605		(285)		47,365
Collateralized loan obligations		263,579		798		(68)		264,309
Obligations of state and political subdivisions		45,118		813		(70)		45,861
Corporate and other debt securities		6,500		0		(156)		6,344
	$	960,220	$	4,202	$	(8,618)	$	955,804

SECURITIES HELD TO MATURITY
Mortgage-backed securities of U.S. Government Sponsored Entities	$	172,261	$	746	$	(1,392)	$	171,615
Collateralized mortgage obligations of U.S. Government Sponsored Entities		181,280		56		(2,767)		178,569
Commercial mortgage backed securities of U.S. Government Sponsored Entities		17,462		705		0		18,167
Collateralized loan obligations		40,523		303		0		40,826
Private mortgage backed securities		5,337		9		(53)		5,293
	$	416,863	$	1,819	$	(4,212)	$	414,470

	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	12,073	$	255	$	0	$	12,328
Mortgage-backed securities of U.S. Government Sponsored Entities		287,726		585		(4,823)		283,488
Collateralized mortgage obligations of U.S. Government Sponsored Entities		238,805		314		(5,065)		234,054
Commercial mortgage backed securities of U.S. Government Sponsored Entities		22,351		222		(28)		22,545
Private mortgage backed securities		32,780		0		(791)		31,989
Private collateralized mortgage obligations		67,542		563		(816)		67,289
Collateralized loan obligations		124,716		838		(665)		124,889
Obligations of state and political subdivisions		63,161		622		(895)		62,888
Corporate and other debt securities		74,121		257		(517)		73,861
Private commercial mortgage backed securities		37,534		111		(473)		37,172
	$	960,809	$	3,767	$	(14,073)	$	950,503

SECURITIES HELD TO MATURITY
Mortgage-backed securities of U.S. Government Sponsored Entities	$	159,941	$	704	$	(1,243)	$	159,402
Collateralized mortgage obligations of U.S. Government Sponsored Entities		147,208		386		(2,630)		144,964
Commercial mortgage backed securities of U.S. Government Sponsored Entities		17,375		233		(74)		17,534
Collateralized loan obligations		41,547		430		(314)		41,663
Private mortgage backed securities		6,427		0		(109)		6,318
	$	372,498	$	1,753	$	(4,370)	$	369,881

Proceeds from sales of securities during 2017 were $235.6 million, with gross gains at $1.6 million and gross losses at $1.5 million. Proceeds from sales of securities during 2016 were $40.1 million with gross gains of $0.5 million and gross losses of $0.1 million. Proceeds from sales of securities during 2015 were $60.3 million with gross gains of $0.7 million and gross losses of $0.5 million.

Securities at December 31, 2017 with a fair value of $169.0 million were pledged as collateral for United States Treasury deposits, other public deposits and trust deposits. Securities with fair value of $216.1 million were pledged as collateral for repurchase agreements.

The amortized cost and fair value of securities at December 31, 2017, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties.

	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Due in less than one year	$	0	$	0	$	6,248	$	6,473
Due after one year through five years		3,600		3,607		42,448		42,616
Due after five years through ten years		36,923		37,219		256,306		257,449
Due after ten years		0		0		13,170		13,376
		40,523		40,826		318,172		319,914
Mortgage-backed securities of U.S. Government Sponsored Entities		172,261		171,616		318,771		316,356
Collateralized mortgage obligations of U.S. Government Sponsored Entities		181,279		178,567		235,466		231,044
Commercial mortgage backed securities of U.S. Government Sponsored Entities		17,463		18,168		16,210		16,341
Private mortgage-backed securities		0		0		18,056		18,440
Private collateralized mortgage obligations		5,337		5,293		47,045		47,365
Corporate and other debt securities		0		0		6,500		6,344
	$	416,863	$	414,470	$	960,220	$	955,804

The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flows analyses, using observable market data where available. The tables below indicate the amount of securities with unrealized losses and period of time for which these losses were outstanding at December 31, 2017 and December 31, 2016, respectively.

	December 31, 2017
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. Government Sponsored Entities	$	1,107	$	(5)	$	0	$	0	$	1,107	$	(5)
Mortgage-backed securities of U.S. Government Sponsored Entities		123,195		(515)		213,590		(4,183)		336,785		(4,698)
Collateralized mortgage obligations of U.S. Government Sponsored Entities		176,452		(1,507)		199,086		(5,955)		375,538		(7,462)
Commercial mortgage backed securities of U.S. Government Sponsored Entities		5,076		(25)		1,049		(9)		6,125		(34)
Private mortgage backed securities		0		0		0		0		0		0
Private collateralized mortgage obligations		0		0		20,744		(338)		20,744		(338)
Collateralized loan obligations		14,933		(68)		0		0		14,933		(68)
Obligations of state and political subdivisions		5,414		(14)		5,864		(56)		11,278		(70)
Corporate and other debt securities		6,500		(156)		0		0		6,500		(156)
Total temporarily impaired securities	$	332,677	$	(2,290)	$	440,333	$	(10,541)	$	773,010	$	(12,831)

	December 31, 2016
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Mortgage-backed securities of U.S. Government Sponsored Entities	$	327,759	$	(5,991)	$	5,387	$	(75)	$	333,146	$	(6,066)
Collateralized mortgage obligations of U.S. Government Sponsored Entities		234,175		(5,599)		58,912		(2,096)		293,087		(7,695)
Commercial mortgage backed securities of U.S. Government Sponsored Entities		7,934		(102)		0		0		7,934		(102)
Private mortgage backed securities		0		0		36,848		(900)		36,848		(900)
Private collateralized mortgage obligations		1,460		0		38,417		(816)		39,877		(816)
Collateralized loan obligations		8,152		(41)		51,694		(938)		59,846		(979)
Obligations of state and political subdivisions		39,321		(895)		0		0		39,321		(895)
Corporate and other debt securities		33,008		(517)		0		0		33,008		(517)
Private commercial mortgage backed securities		12,667		(306)		7,139		(167)		19,806		(473)
Total temporarily impaired securities	$	664,476	$	(13,451)	$	198,397	$	(4,992)	$	862,873	$	(18,443)

The two tables above include securities held to maturity that were transferred from available for sale into held to maturity. In 2014, approximately $158.8 million of available for sale securities were transferred into held to maturity. The unrealized losses at the date of transfer were $3.1 million. These unrealized losses remained in other accumulated comprehensive income and are amortized over the remaining life of the securities as an adjustment to yield consistent with the amortization of a discount. The amortization of unrealized losses reported in equity offsets the effect of discount amortization reported in interest income. As of December 31, 2017 the remaining unamortized amount was $1.2 million. The fair value of those securities in an unrealized loss position for less than 12 months at December 31, 2017 and December 31, 2016 is $22.9 million and $22.8 million respectively. The unrealized losses on those securities in an unrealized loss position for less than 12 months at December 31, 2017 and December 31, 2016 is $0.2 million and $0.4 million, respectively. The fair value of those securities in an unrealized loss position for 12 months or more at December 31, 2017 and December 31, 2016 is $15.3 million and none, respectively. The unrealized losses on those securities in an unrealized loss position for 12 months or more at December 31, 2017 and December 31, 2016 is $0.4 million and none, respectively.

At December 31, 2017, the Company had $12.2 million of unrealized losses on mortgage backed securities of government sponsored entities having a fair value of $718.4 million that were attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Based on the assessment of these mitigating factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

At December 31, 2017, approximately $0.3 million of the unrealized losses pertain to private label securities secured by seasoned residential collateral with a fair value of $20.8 million. Management attributes the loss to a combination of factors including relative changes in interest rates since the time of purchase. The collateral underlying these mortgage investments are 30- and 15-year fixed and 10/1 adjustable rate mortgage loans with low loan to values, and improving subordination. Based on its assessment of these factors and bi-annual stress testing, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

As of December 31, 2017 the Company does not intend to sell securities that are in an unrealized loss position and it is not more likely than not that the Company will be required to sell these securities before recovery of the amortized cost basis. Therefore, management does not consider any investment to be other-than-temporarily impaired at December 31, 2017.

Included in other assets is $32.5 million of Federal Home Loan Bank and Federal Reserve Bank stock stated at par value. At December 31, 2017, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these cost method investment securities.

The Company acquired 200,000 shares of Visa Class B stock in March 2017 at a cost of $6.2 million. The shares were sold in December 2017 at a gain of $15.2 million. Proceeds from the sale were not received until January 2018.

The Company also holds 11,330 shares of Visa Class B stock, which following resolution of Visa litigation will be converted to Visa Class A shares (the conversion rate presently is 1.6483 shares of Class A stock for each share of Class B stock) for a total of 18,675 shares of Visa Class A stock. Our ownership is related to prior ownership in Visa's network, while Visa operated as a cooperative. This ownership is recorded on our financial records at zero basis.