5. INVESTMENT SECURITIES

The following tables detail the amortized cost and the estimated fair value of our investments in available-for-sale and held-to-maturity debt securities as well as our equity investments. None of our investments are classified as trading.



	December 31, 2018
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Available-for-Sale Debt Securities
CMO	$	376,867	$	1,721	$	6,838	$	371,750
FNMA MBS	655,485		1,526		12,938		644,073
FHLMC MBS	155,758		558		2,394		153,922
GNMA MBS	36,117		97		880		35,334
	$	1,224,227	$	3,902	$	23,050	$	1,205,079
Held-to-Maturity Debt Securities⁽¹⁾
State and political subdivisions	$	149,950	$	275	$	794	$	149,431

Equity Investments⁽²⁾
Visa Class B shares	$	13,918	$	20,015	$	—	$	33,933
Other equity investments	3,300		—		—		3,300
	$	17,218	$	20,015	$	—	$	37,233


(1)	Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at fair value at the time of transfer. The amortized cost of held-to-maturity securities included net unrealized gains of $1.0 million at December 31, 2018, related to securities transferred, which are offset in Accumulated other comprehensive loss, net of tax.


(2)	Equity investments are included in Other investments in the audited Consolidated Statements of Financial Condition.



	December 31, 2017
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Available-for-Sale Debt Securities
CMO	$	250,592	$	88	$	4,141	$	246,539
FNMA MBS	479,218		941		6,172		473,987
FHLMC MBS	88,681		118		924		87,875
GNMA MBS	29,300		209		411		29,098
	$	847,791	$	1,356	$	11,648	$	837,499
Held-to-Maturity Debt Securities⁽¹⁾
State and political subdivisions	$	161,186	$	1,758	$	91	$	162,853

Equity Investments⁽²⁾⁽³⁾
Other equity investments	$	643	$	—	$	20	$	623
	$	643	$	—	$	20	$	623


(1)	Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at fair value at the time of transfer. The amortized cost of held-to-maturity securities included net unrealized gains of $1.6 million at December 31, 2017, related to securities transferred, which are offset in Accumulated other comprehensive loss, net of tax.


(2)	Equity investments are included in Other investments in the audited Consolidated Statements of Financial Condition.


(3)	This mutual fund was sold in 2018.

The scheduled maturities of our available-for-sale and held-to-maturity at December 31, 2018 and December 31, 2017 are presented in the table below:



	Available-for-Sale
(Dollars in thousands)	Amortized Cost		Fair Value
December 31, 2018 ⁽¹⁾
Within one year	$	—	$	—
After one year but within five years	19,714		19,423
After five years but within ten years	170,118		163,731
After ten years	1,034,395		1,021,925
	$	1,224,227	$	1,205,079
December 31, 2017 ^{(1) (2)}
Within one year	$	—	$	—
After one year but within five years	20,051		19,825
After five years but within ten years	179,812		175,583
After ten years	647,928		642,091
	$	847,791	$	837,499

	Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value
December 31, 2018 ⁽¹⁾
Within one year	$	1,018	$	1,016
After one year but within five years	6,703		6,701
After five years but within ten years	29,613		29,547
After ten years	112,616		112,167
	$	149,950	$	149,431
December 31, 2017 ⁽¹⁾
Within one year	$	322	$	320
After one year but within five years	5,895		5,894
After five years but within ten years	18,751		18,873
After ten years	136,218		137,766
	$	161,186	$	162,853


(1)	Actual maturities could differ from contractual maturities.


(2)	Included in the investment portfolio, but not in the table above, is a mutual fund with an amortized cost and fair value as of December 31, 2017 of $0.6 million which had no stated maturity and which was sold in 2018.

Mortgage-backed securities (MBS) may have expected maturities that differ from their contractual maturities. These differences arise because issuers may have the right to call securities and borrowers may have the right to prepay obligations with or without prepayment penalty.

Investment securities with fair market values aggregating $914.5 million and $688.2 million were pledged as collateral for retail customer repurchase agreements, municipal deposits, and other obligations as of December 31, 2018 and 2017, respectively.

During 2018, we sold $7.0 million of debt securities categorized as available for sale, resulting in realized gains of less than $0.1 million and no realized losses. During 2017, we sold $457.0 million of debt securities categorized as available for sale, resulting in realized gains of $2.1 million and realized losses of less than $0.1 million. The cost basis of all investment securities sales is based on the specific identification method. During 2016, we sold $201.8 million of investment securities categorized as available for sale, resulting in realized gains of $2.4 million and realized losses of less than $0.1 million.

During 2018, we sold $6.2 million of equity securities, specifically Visa Class B shares, resulting in realized gains of $3.8 million and no realized losses. There were no such sales 2017 or 2016.

As of December 31, 2018, and December 31, 2017, our debt securities portfolio had remaining unamortized premiums of $12.7 million and $14.1 million, respectively, and unaccreted discounts of $2.5 million and $1.3 million, respectively.

For those debt securities with unrealized losses, the table below shows our gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at December 31, 2018.



	Duration of Unrealized Loss Position
	Less than 12 months				12 months or longer				Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available-for-sale debt securities:
CMO	$	17,143	$	40	$	212,208	$	6,798	$	229,351	$	6,838
FNMA MBS	34,214		162		407,638		12,776		441,852		12,938
FHLMC MBS	16,025		21		76,469		2,373		92,494		2,394
GNMA MBS	5,837		79		21,805		801		27,642		880
Total temporarily impaired investments	$	73,219	$	302	$	718,120	$	22,748	$	791,339	$	23,050

Held-to-maturity debt securities:
State and political subdivisions	$	91,228	$	155	$	58,203	$	639	$	149,431	$	794
Total temporarily impaired investments	$	91,228	$	155	$	58,203	$	639	$	149,431	$	794



	Duration of Unrealized Loss Position
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
Available-for-sale debt securities:
CMO	$	146,726	$	1,820	$	77,149	$	2,321	$	223,875	$	4,141
FNMA MBS	204,921		1,479		126,342		4,693		331,263		6,172
FHLMC MBS	42,514		269		21,405		655		63,919		924
GNMA MBS	4,615		56		14,782		355		19,397		411
Total temporarily impaired investments	$	398,776	$	3,624	$	239,678	$	8,024	$	638,454	$	11,648

Held-to-maturity debt securities:
State and political subdivisions	$	23,404	$	59	$	5,625	$	32	$	29,029	$	91
Total temporarily impaired investments	$	23,404	$	59	$	5,625	$	32	$	29,029	$	91

Other equity investments	$	—	$	—	$	624	$	20	$	624	$	20

At December 31, 2018, we owned debt securities totaling $940.8 million for which the amortized cost basis exceeded fair value. Total unrealized losses on these securities were $23.8 million at December 31, 2018. The temporary impairment is the result of changes in market interest rates subsequent to purchase. Our investment portfolio is reviewed each quarter for indications of OTTI. This review includes analyzing the length of time and the extent to which the fair value has been lower than the amortized cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and our intent and ability to hold the investment for a period of time sufficient to allow for full recovery of the unrealized loss. We evaluate our intent and ability to hold debt securities based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position. We do not have the intent to sell, nor is it more likely-than-not we will be required to sell these securities before we are able to recover the amortized cost basis.

All debt securities, with the exception of one having a fair value of $0.6 million at December 31, 2018, were AA- rated or better at the time of purchase and remained investment grade at December 31, 2018. All securities were evaluated for OTTI at December 31, 2018 and 2017. The result of this evaluation showed no OTTI as of December 31, 2018 or 2017. The estimated weighted average duration of MBS was 4.7 years at December 31, 2018.