Investment Securities

The amortized cost and fair value of investment securities available for sale as of March 31, 2019 and December 31, 2018 are as follows:

As of March 31, 2019



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	100	$	—	$	—		$	100
Obligations of the U.S. government and agencies	188,079		103		(1,436		)	186,746
Obligations of state and political subdivisions	8,644		5		(11		)	8,638
Mortgage-backed securities	323,610		1,365		(2,062		)	322,913
Collateralized mortgage obligations	40,995		182		(691		)	40,486
Other investment securities	1,100		—		—			1,100
Total	$	562,528	$	1,655	$	(4,200	)	$	559,983

As of December 31, 2018



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	200,026	$	—	$	(13	)	$	200,013
Obligations of the U.S. government and agencies	198,604		107		(2,856		)	195,855
Obligations of state and political subdivisions	11,372		3		(43		)	11,332
Mortgage-backed securities	294,076		554		(4,740		)	289,890
Collateralized mortgage obligations	40,150		141		(1,039		)	39,252
Other investment securities	1,100		—		—			1,100
Total	$	745,328	$	805	$	(8,691	)	$	737,442

The following tables present the aggregate amount of gross unrealized losses as of March 31, 2019 and December 31, 2018 on available for sale investment securities classified according to the amount of time those securities have been in a continuous unrealized loss position:

As of March 31, 2019



	Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Obligations of the U.S. government and agencies	$	—	$	—		$	141,114	$	(1,436	)	$	141,114	$	(1,436	)
Obligations of state and political subdivisions	—		—			3,200		(11		)	3,200		(11		)
Mortgage-backed securities	18,237		(183		)	193,339		(1,879		)	211,576		(2,062		)
Collateralized mortgage obligations	—		—			25,944		(691		)	25,944		(691		)
Total	$	18,237	$	(183	)	$	363,597	$	(4,017	)	$	381,834	$	(4,200	)

As of December 31, 2018



	Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities	$	199,912	$	(13	)	$	—	$	—		$	199,912	$	(13	)
Obligations of the U.S. government and agencies	12,916		(62		)	140,506		(2,794		)	153,422		(2,856		)
Obligations of state and political subdivisions	—		—			3,989		(43		)	3,989		(43		)
Mortgage-backed securities	43,276		(352		)	195,697		(4,388		)	238,973		(4,740		)
Collateralized mortgage obligations	540		(1		)	27,077		(1,038		)	27,617		(1,039		)
Total	$	256,644	$	(428	)	$	367,269	$	(8,263	)	$	623,913	$	(8,691	)

Management evaluates the Corporation’s investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. The investment portfolio includes debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state and local municipalities and other issuers. All fixed income investment securities in the Corporation’s investment portfolio are rated as investment-grade or higher. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, interest rates and the bond rating of each security. The unrealized losses presented in the tables above are temporary in nature and are primarily related to market interest rates rather than the underlying credit quality of the issuers or collateral. Management does not believe that these unrealized losses are other-than-temporary. Management does not have the intent to sell these securities prior to their maturity or the recovery of their cost bases and believes that it is more likely than not that it will not have to sell these securities prior to their maturity or the recovery of their cost bases.

As of March 31, 2019 and December 31, 2018, securities having a fair value of $120.4 million and $123.5 million, respectively, were specifically pledged as collateral for public funds, trust deposits, the Federal Reserve Board discount window program, Federal Home Loan Bank ("FHLB") borrowings and other purposes. Advances by the FHLB are collateralized by a blanket lien on non-pledged, mortgage-related loans as part of the Corporation’s borrowing agreement with the FHLB as well as certain securities individually pledged by the Corporation.

The amortized cost and fair value of available for sale investment and mortgage-related securities available for sale as of March 31, 2019 and December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	March 31, 2019				December 31, 2018
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investment securities:
Due in one year or less	$	9,055	$	9,041	$	209,129	$	209,099
Due after one year through five years	166,223		165,027		180,657		177,972
Due after five years through ten years	10,098		10,126		7,258		7,268
Due after ten years	12,547		12,390		14,058		13,961
Subtotal	197,923		196,584		411,102		408,300
Mortgage-related securities⁽¹⁾	364,605		363,399		334,226		329,142
Total	$	562,528	$	559,983	$	745,328	$	737,442

(1) Expected maturities of mortgage-related securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The amortized cost and fair value of investment securities held to maturity as of March 31, 2019 and December 31, 2018 are as follows:

As of March 31, 2019



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Mortgage-backed securities	$	10,457	$	10	$	(143	)	$	10,324

As of December 31, 2018



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Mortgage-backed securities	$	8,684	$	—	$	(246	)	$	8,438

The following tables present the aggregate amount of gross unrealized losses as of March 31, 2019 and December 31, 2018 on held to maturity securities classified according to the amount of time those securities have been in a continuous unrealized loss position:

As of March 31, 2019



	Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Mortgage-backed securities	$	1,814	$	(13	)	$	7,187	$	(130	)	$	9,001	$	(143	)

As of December 31, 2018



	Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Mortgage-backed securities	$	1,315	$	(4	)	$	7,123	$	(242	)	$	8,438	$	(246	)

The amortized cost and fair value of held to maturity investment securities as of March 31, 2019 and December 31, 2018, by contractual maturity, are shown below:



	March 31, 2019				December 31, 2018
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Mortgage-backed securities⁽¹⁾	$	10,457	$	10,324	$	8,684	$	8,438

As of March 31, 2019 and December 31, 2018, the Corporation’s investment securities held in trading accounts totaled $8.2 million and $7.5 million, respectively, and primarily consist of deferred compensation trust accounts which are invested in listed mutual funds whose diversification is at the discretion of the deferred compensation plan participants and a rabbi trust account established to fund certain unqualified pension obligations. Investment securities held in trading accounts are reported at fair value, with adjustments in fair value reported through income.