Investment Securities

At December 31, 2018 and 2017, securities with a carrying value of $925 million and $1.04 billion, respectively, were pledged to secure public deposits, derivatives and other secured borrowings.

The cost basis, unrealized gains and losses, and fair value of debt securities held-to-maturity as of the dates indicated are as follows (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of December 31, 2018
State and political subdivisions	$	68,551	$	952	$	2,191	$	67,312
Residential mortgage-backed securities	176,488		652		5,094		172,046
Commercial mortgage-backed securities	29,368		173		96		29,445
Total	$	274,407	$	1,777	$	7,381	$	268,803
As of December 31, 2017
State and political subdivisions	$	71,959	$	1,574	$	178	$	73,355
Residential mortgage-backed securities	208,805		1,586		3,289		207,102
Commercial mortgage-backed securities	40,330		625		136		40,819
Total	$	321,094	$	3,785	$	3,603	$	321,276

The cost basis, unrealized gains and losses, and fair value of debt securities available-for-sale as of the dates indicated are as follows (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of December 31, 2018
U.S. Treasuries	$	150,712	$	767	$	2,172	$	149,307
U.S. Government agencies	25,493		335		275		25,553
State and political subdivisions	234,750		907		1,716		233,941
Residential mortgage-backed securities	1,464,380		3,428		21,898		1,445,910
Commercial mortgage-backed securities	399,663		187		7,933		391,917
Corporate bonds	200,582		502		1,921		199,163
Asset-backed securities	184,683		328		2,335		182,676
Total	$	2,660,263	$	6,454	$	38,250	$	2,628,467
As of December 31, 2017
U.S. Treasuries	$	122,025	$	—	$	912	$	121,113
U.S. Government agencies	26,129		269		26		26,372
State and political subdivisions	195,663		2,019		396		197,286
Residential mortgage-backed securities	1,317,371		7,058		12,696		1,311,733
Commercial mortgage-backed securities	420,685		31		5,238		415,478
Corporate bonds	305,265		1,513		425		306,353
Asset-backed securities	236,533		1,078		153		237,458
Other	57		—		—		57
Total	$	2,623,728	$	11,968	$	19,846	$	2,615,850

At year-end 2018 and 2017, there were no holdings of debt obligations of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The following summarizes debt securities held-to-maturity in an unrealized loss position as of the dates indicated (in thousands):



	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2018
State and political subdivisions	$	7,062	$	46	$	34,146	$	2,145	$	41,208	$	2,191
Residential mortgage-backed securities	6,579		61		136,376		5,033		142,955		5,094
Commercial mortgage-backed securities	—		—		4,290		96		4,290		96
Total unrealized loss position	$	13,641	$	107	$	174,812	$	7,274	$	188,453	$	7,381

As of December 31, 2017
State and political subdivisions	$	8,969	$	178	$	—	$	—	$	8,969	$	178
Residential mortgage-backed securities	82,893		1,377		64,337		1,912		147,230		3,289
Commercial mortgage-backed securities	12,460		71		1,531		65		13,991		136
Total unrealized loss position	$	104,322	$	1,626	$	65,868	$	1,977	$	170,190	$	3,603

The following summarizes debt securities available-for-sale in an unrealized loss position as of the dates indicated (in thousands):



	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2018
U.S. Treasuries	$	—	$	—	$	120,391	$	2,172	$	120,391	$	2,172
U.S. Government agencies	—		—		21,519		275		21,519		275
State and political subdivisions	15,160		28		133,500		1,688		148,660		1,716
Residential mortgage-backed securities	234,583		808		775,360		21,090		1,009,943		21,898
Commercial mortgage-backed securities	4,552		594		355,292		7,339		359,844		7,933
Corporate bonds	—		—		117,296		1,921		117,296		1,921
Asset-backed securities	74,492		1,879		31,968		456		106,460		2,335
Total unrealized loss position	$	328,787	$	3,309	$	1,555,326	$	34,941	$	1,884,113	$	38,250
As of December 31, 2017
U.S. Treasuries	$	121,113	$	912	$	—	$	—	$	121,113	$	912
U.S. Government agencies	1,976		13		1,677		13		3,653		26
State and political subdivisions	61,494		365		5,131		31		66,625		396
Residential mortgage-backed securities	655,180		5,692		242,501		7,004		897,681		12,696
Commercial mortgage-backed securities	309,025		3,007		86,422		2,231		395,447		5,238
Corporate bonds	55,916		325		900		100		56,816		425
Asset-backed securities	28,695		126		5,031		27		33,726		153
Total unrealized loss position	$	1,233,399	$	10,440	$	341,662	$	9,406	$	1,575,061	$	19,846

At December 31, 2018, there were 277 debt securities available-for-sale and 67 debt securities held-to-maturity that were in an unrealized loss position. Management does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of its amortized cost basis. Unrealized losses at December 31, 2018 and 2017 were primarily attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analyst’s reports. No impairment charges were recognized during 2018, 2017 or 2016.

Realized gains and losses are derived using the specific identification method for determining the cost of the securities sold. The following summarizes securities sales activities for the years ended December 31 (in thousands):



	2018			2017			2016

Proceeds from sales	$	168,891		$	340,540		$	199,864

Gross gains on sales	$	2,082		$	1,247		$	1,647
Gross losses on sales	(2,738		)	(1,205		)	(665		)
Net (losses) gains on sales of securities	$	(656	)	$	42		$	982

Income tax (benefit) expense attributable to sales	$	(132	)	$	14		$	371

The amortized cost and fair value of debt available-for-sale and held-to-maturity securities at December 31, 2018, by contractual maturity, are presented in the following table (in thousands):



	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
US Treasuries:
1 to 5 years	$	122,563	$	120,391	$	—	$	—
5 to 10 years	28,149		28,916		—		—
	150,712		149,307		—		—
US Government agencies:
1 to 5 years	20,794		20,538		—		—
More than 10 years	4,699		5,015		—		—
	25,493		25,553		—		—
State and political subdivisions:
Within 1 year	500		504		5,830		5,859
1 to 5 years	43,526		43,045		10,968		11,317
5 to 10 years	41,841		41,771		8,354		8,928
More than 10 years	148,883		148,621		43,399		41,208
	234,750		233,941		68,551		67,312
Corporate bonds:
1 to 5 years	198,082		196,654		—		—
5 to 10 years	1,500		1,514		—		—
More than 10 years	1,000		995		—		—
	200,582		199,163		—		—
Asset-backed securities:
5 to 10 years	2,305		2,300		—		—
More than 10 years	182,378		180,376		—		—
	184,683		182,676		—		—
Total securities other than mortgage-backed securities:
Within 1 year	500		504		5,830		5,859
1 to 5 years	384,965		380,628		10,968		11,317
5 to 10 years	73,795		74,501		8,354		8,928
More than 10 years	336,960		335,007		43,399		41,208
Residential mortgage-backed securities	1,464,380		1,445,910		176,488		172,046
Commercial mortgage-backed securities	399,663		391,917		29,368		29,445
	$	2,660,263	$	2,628,467	$	274,407	$	268,803

Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations.