INVESTMENT SECURITIES

The following tables present a summary of investment securities:



	Amortized Cost		Unrealized					Fair Value
	Amortized Cost		Gains		Losses			Fair Value
	(In thousands)
At December 31, 2017:
Available-for-sale securities at fair value:
U.S. government and agencies	$	35,132	$	—	$	(833	)	$	34,299
Government-sponsored entities	305,101		22		(2,622		)	302,501
Municipal bonds	299,647		4,559		(1,148		)	303,058
Mortgage-backed securities (1)	521,753		491		(12,568		)	509,676
Other	20,794		—		—			20,794
Total	$	1,182,427	$	5,072	$	(17,171	)	$	1,170,328

Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)	$	74,576	$	—	$	(795	)	$	73,781
Total	$	74,576	$	—	$	(795	)	$	73,781



	Amortized Cost		Unrealized					Fair Value
	Amortized Cost		Gains		Losses			Fair Value
	(In thousands)
At December 31, 2016:
Available-for-sale securities at fair value:
U.S. government and agencies	$	40,704	$	86	$	(854	)	$	39,936
Government-sponsored entities	337,865		1,058		(2,259		)	336,664
Municipal bonds	296,271		2,116		(4,990		)	293,397
Mortgage-backed securities (1)	584,960		928		(15,561		)	570,327
Other	23,361		447		—			23,808
Total	$	1,283,161	$	4,635	$	(23,664	)	$	1,264,132

Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)	$	93,079	$	1	$	(476	)	$	92,604
Total	$	93,079	$	1	$	(476	)	$	92,604

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(1)	All mortgage-backed securities are guaranteed by U.S. government agencies or Government-sponsored entities.

In the tables below, the weighted average yield is calculated based on average amortized cost which does not include the effect of unrealized changes in fair value. Certain securities are callable before their final maturity. Additionally, certain securities (such as mortgage-backed securities) are shown within the table below based on their final (contractual) maturity, but, due to prepayments, are expected to have shorter lives.

The following tables present the maturities of available-for-sale investment securities, based on contractual maturity, and the weighted average yields of such securities as of December 31, 2017:



	U.S. government and agencies (1)						Government-sponsored entities (1)
	Amortized cost		Fair value		Weighted average yield		Amortized cost		Fair value		Weighted average yield
	(In thousands)
Within one year	$	—	$	—	—	%	$	44,033	$	43,967	1.39	%
After one, but within five years	15,192		15,105		1.53	%	224,747		223,315		1.86	%
After five, but within ten years	19,940		19,194		1.73	%	36,321		35,219		2.05	%
Greater than ten years	—		—		—	%	—		—		—	%
Total	$	35,132	$	34,299	1.64	%	$	305,101	$	302,501	1.81	%



	Municipal bonds (1)						Mortgage-backed securities (2)
	Amortized cost		Fair value		Weighted average yield (3)		Amortized cost		Fair value		Weighted average yield
	(In thousands)
Within one year	$	15,770	$	15,756	1.85	%	$	17	$	17	2.33	%
After one, but within five years	57,178		57,260		2.63	%	11,460		11,407		2.25	%
After five, but within ten years	33,979		34,719		3.73	%	236,360		229,770		2.18	%
Greater than ten years	192,720		195,323		4.07	%	273,916		268,482		2.10	%
Total	$	299,647	$	303,058	3.64	%	$	521,753	$	509,676	2.14	%



	Other (4)
	Amortized cost		Fair value		Weighted average yield
	(In thousands)
Within one year	$	20,794	$	20,794	—	%
After one, but within five years	—		—		—	%
After five, but within ten years	—		—		—	%
Greater than ten years	—		—		—	%
Total	$	20,794	$	20,794	—	%

The following table presents the maturities of held-to-maturity investment securities, based on contractual maturity, and the weighted average yields of such securities as of December 31, 2017:



	Mortgage-backed securities (2)
	Amortized cost		Fair value		Weighted average yield
	(In thousands)
Within one year	$	—	$	—	—	%
After one, but within five years	—		—		—	%
After five, but within ten years	16,722		16,551		2.17	%
Greater than ten years	57,854		57,230		2.30	%
Total	$	74,576	$	73,781	2.27	%

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(1)	Certain securities are callable before their final maturity.


(2)	Mortgage-backed securities are shown based on their final (contractual) maturity, but, due to prepayments, they are expected to have shorter lives.


(3)	Yields shown on a fully taxable equivalent (“FTE”) basis. The tax rate used in the table above was the tax rate in effect on December 31, 2017. The recent enactment of the Tax Act will reduce the rate applied in future periods, which will result in a lower FTE yield.


(4)	Other securities consist of money market mutual funds and equity securities held by certain Wealth Advisory and Investment Management businesses.

The weighted average remaining maturity at December 31, 2017 was 8.1 years for available-for-sale investment securities, with $184.9 million of available-for-sale investment securities callable before maturity. The weighted average remaining maturity at December 31, 2016 was 9.1 years for available-for-sale investment securities, with $140.4 million of available-for-sale investment securities callable before maturity.

The weighted average remaining maturity for held-to-maturity investment securities was 11.9 years and 12.9 years at December 31, 2017 and December 31, 2016, respectively.

The following table presents the proceeds from sales, gross realized gains and gross realized losses for available-for-sale investment securities that were sold during the following years:



	Year Ended December 31,
	2017			2016			2015
	(In thousands)
Proceeds from sales	$	148,407		$	50,049		$	34,160
Realized gains	519			522			272
Realized losses	(143		)	(1		)	(36		)

The following tables present information regarding securities at December 31, 2017 and 2016 having temporary impairment, due to the fair values having declined below the amortized cost of the individual securities, and the time period that the investments have been temporarily impaired.



	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses			# of securities
	(In thousands, except number of securities)
December 31, 2017
Available-for-sale securities
U.S. government and agencies	$	14,902	$	(79	)	$	19,397	$	(754	)	$	34,299	$	(833	)	6
Government-sponsored entities	220,275		(1,350		)	38,273		(1,272		)	258,548		(2,622		)	36
Municipal bonds	46,112		(131		)	50,842		(1,017		)	96,954		(1,148		)	63
Mortgage-backed securities (1)	97,117		(903		)	386,785		(11,665		)	483,902		(12,568		)	103
Total	$	378,406	$	(2,463	)	$	495,297	$	(14,708	)	$	873,703	$	(17,171	)	208

Held-to-maturity securities
Mortgage-backed securities (1)	$	59,218	$	(534	)	$	14,563	$	(261	)	$	73,781	$	(795	)	16
Total	$	59,218	$	(534	)	$	14,563	$	(261	)	$	73,781	$	(795	)	16



	Less than 12 months					12 months or longer					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses			# of securities
	(In thousands, except number of securities)
December 31, 2016
Available-for-sale securities
U.S. government and agencies	$	19,094	$	(838	)	$	643	$	(16	)	$	19,737	$	(854	)	4
Government-sponsored entities	125,412		(2,259		)	—		—			125,412		(2,259		)	18
Municipal bonds	182,395		(4,957		)	2,720		(33		)	185,115		(4,990		)	109
Mortgage-backed securities (1)	492,008		(13,988		)	41,544		(1,573		)	533,552		(15,561		)	99
Total	$	818,909	$	(22,042	)	$	44,907	$	(1,622	)	$	863,816	$	(23,664	)	230

Held-to-maturity securities
Mortgage-backed securities (1)	$	87,483	$	(476	)	$	—	$	—		$	87,483	$	(476	)	15
Total	$	87,483	$	(476	)	$	—	$	—		$	87,483	$	(476	)	15

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(1)	All mortgage-backed securities are guaranteed by U.S. government agencies or Government-sponsored entities.

As of December 31, 2017, the U.S. government and agencies securities and government-sponsored entities securities in the first table above had current Moody’s credit ratings of Aaa. The mortgage-backed securities in the first table above had a current Standard and Poor’s credit rating of at least AA. The municipal bonds in the first table above had a current Standard and Poor’s credit rating of at least AA- or a current Moody’s credit rating of at least Aa3. The other securities in the first table above consisted of equity securities. At December 31, 2017, the Company does not consider these investments other-than-temporarily impaired because the decline in fair value on investments is primarily attributed to changes in interest rates and not credit quality.

At December 31, 2017 and December 31, 2016, the amount of investment securities in an unrealized loss position greater than 12 months, as well as in total, was primarily due to changes in interest rates. As of December 31, 2017, the Company had no intent to sell any securities in an unrealized loss position and it is not more likely than not that the Company would be forced to sell any of these securities prior to the full recovery of all unrealized loss amounts. Subsequent to December 31, 2017 and through the date of the filing of this Annual Report on Form 10-K, no securities were downgraded to below investment grade, nor were any securities in an unrealized loss position sold.

The following table presents the concentration of securities with any one issuer that exceeds ten percent of shareholders’ equity as of December 31, 2017:



	Amortized cost		Fair value
	(In thousands)
Government National Mortgage Association	$	104,188	$	101,941
Federal Home Loan Mortgage Corporation	349,926		342,374
Federal Home Loan Bank	163,151		161,747
Federal National Mortgage Association	259,108		255,143
Total	$	876,373	$	861,205

Cost method investments

The Company invests in low-income housing tax credits, which are included in other assets, to encourage private capital investment in the construction and rehabilitation of low-income housing. The Company makes these investments as an indirect subsidy that allows investors, such as the Company, in a flow-through limited liability entity, such as limited partnerships or limited liability companies that manage or invest in qualified affordable housing projects, to receive the benefits of the tax credits allocated to the entity that owns the qualified affordable housing project. The Company also holds partnership interests in venture capital funds formed to provide financing to small businesses and to promote community development.

The Company amortizes its investment in the low income housing tax credits using the proportional amortization method. Under the proportional amortization method, the Company amortizes the cost of its investment, in proportion to the tax credits and other tax benefits it receives to income tax expense. Included in income tax expense was amortization of $2.7 million, $1.6 million, and $1.3 million for the years ending December 31, 2017, 2016 and 2015, respectively. Also included in income tax expense were the related tax benefits of $2.2 million, $1.7 million and $1.3 million for the years ending December 31, 2017, 2016, and 2015, respectively.

The Company had $39.4 million and $34.2 million in cost method investments included in other assets as of December 31, 2017 and December 31, 2016, respectively. In addition the Company had $11.5 million and $11.3 million in unadvanced funds related to commitments in these investments as of December 31, 2017 and 2016, respectively.

Under the proportional amortization method, an investment must be tested for impairment when events or changes in circumstances indicate that it is more likely than not that the carrying amount of the investment will not be realized. There was no indication of impairment for the years ending December 31, 2017 and 2016.