Investment securities

Investment securities at December 31, 2016 and 2015 consisted of the following (dollars in thousands):



	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
2016
Available-for-sale
U.S. Agency mortgage-backed securities (MBS)	$	165,933	$	1,828	$	(799	)	$	166,962
Non-agency MBS	252,153		203		(3,408		)	248,948
U.S. Agency asset-backed securities	6,700		419		(57		)	7,062
Corporate securities	71,213		397		(287		)	71,323
Mutual fund	537		—		(13		)	524
	$	496,536	$	2,847	$	(4,564	)	$	494,819
Held-to-maturity
U.S. Agency mortgage-backed securities (MBS)	$	101,563	$	1,195	$	(148	)	$	102,610
Tax credit investments	287		—		—			287
Obligations of state and political subdivisions	38,707		770		(102		)	39,375
	$	140,557	$	1,965	$	(250	)	$	142,272

2015
Available-for-sale
U.S. Agency MBS	$	154,691	$	2,698	$	(455	)	$	156,934
Non-agency MBS	118,765		477		(1,016		)	118,226
U.S. Agency asset-backed securities	7,468		800		(23		)	8,245
Corporate securities	26,199		121		—			26,320
Mutual fund	525		12		—			537
	$	307,648	$	4,108	$	(1,494	)	$	310,262
Held-to-maturity
U.S. Agency mortgage-backed securities (MBS)	$	98,800	$	1,875	$	(5	)	$	100,670
Tax credit investments	421		—		—			421
Obligations of state and political subdivisions	40,203		968		(2		)	41,169
	$	139,424	$	2,843	$	(7	)	$	142,260

The following table presents the fair value and gross unrealized losses of the Bank’s investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2016 and 2015 (dollars in thousands):



	Less than 12 months					12 months or more					Total
	Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses
2016
Available-for-sale
U.S. Agency MBS	$	51,082	$	(786	)	$	1,733	$	(13	)	$	52,815	$	(799	)
Non-Agency MBS	211,909		(3,268		)	1,933		(140		)	213,842		(3,408		)
U.S. Agency asset-backed securities	—		—			1,918		(57		)	1,918		(57		)
Corporate securities	6,709		(287		)	—		—			6,709		(287		)
Mutual fund	524		(13		)	—		—			524		(13		)
	$	270,224	$	(4,354	)	$	5,584	$	(210	)	$	275,808	$	(4,564	)

Held-to-maturity
U.S. Agency MBS	$	7,641	$	(148	)	$	—	$	—		$	7,641	$	(148	)
Obligations of state and political subdivisions	1,942		(102		)	—		—			1,942		(102		)
	$	9,583	$	(250	)	$	—	$	—		$	9,583	$	(250	)
2015
Available-for-sale
U.S. Agency MBS	$	23,630	$	(123	)	$	34,576	$	(332	)	$	58,206	$	(455	)
Non-Agency MBS	66,412		(765		)	12,225		(251		)	78,637		(1,016		)
U.S. Agency asset-backed securities	—		—			1,521		(23		)	1,521		(23		)
	$	90,042	$	(888	)	$	48,322	$	(606	)	$	138,364	$	(1,494	)

Held-to-maturity
U.S. Agency MBS	$	2,063	$	(5	)	$	—	$	—		$	2,063	$	(5	)
Obligations of state and political subdivisions	725		(2		)	—		—			725		(2		)
	$	2,788	$	(7	)	$	—	$	—		$	2,788	$	(7	)

At December 31, 2016 and 2015 there were 87 and 46 securities, respectively, in an unrealized loss position. The unrealized losses on investments in U.S. Agency and non-agency MBS, U.S. Agency asset-backed securities, and corporate securities are primarily due to elevated yield/rate spreads at December 31, 2016 and 2015 as compared to yield/rate relationships prevailing at the time specific investment securities were purchased. Differences between fair value and book value will continue to vary with changes in market interest rates and credit quality risks of such securities. However, temporary differences from book value are expected to lessen as securities approach their maturity dates. Management does not believe that the above gross unrealized losses on investment securities are other-than-temporary and no impairment adjustments have been recorded for the years ended December 31, 2016, 2015 and 2014.

Management intends to hold the investment securities classified as held-to-maturity until they mature, at which time the Company will receive full amortized cost value for such investment securities. Furthermore, as of December 31, 2016, management did not have the intent to sell any of the securities classified as available-for-sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

The amortized cost and estimated fair value of investment securities at December 31, 2016, by contractual maturity, are shown below (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Available-for-sale				Held-to-maturity
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
Due in one year or less	$	3,397	$	3,411	$	—	$	—
Due after one year through five years	75,489		75,632		34,955		35,205
Due after five years through ten years	37,600		37,341		87,817		89,323
Due after ten years	379,513		377,911		17,498		17,457
Mutual fund	537		524		—		—
Tax credit investments	—		—		287		287
	$	496,536	$	494,819	$	140,557	$	142,272

Investment securities with an estimated fair value of approximately $138.3 million and $118.0 million at December 31, 2016 and 2015, respectively, were pledged or in the process of being pledged, to secure various borrowings or available lines of credit and for other purposes as required or permitted by law.

The Company sold no investment securities during the year ended December 31, 2016, and sold $30.0 million and $63.5 million of investment securities during the years ended December 31, 2015 and 2014, respectively.