INVESTMENT SECURITIES

The amortized cost and fair values of investment securities, with gross unrealized gains and losses, consist of the following:



	September 30, 2018
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities available for sale:
U.S. Government-sponsored enterprise obligations	$	40,996	$	5	$	(740	)	$	40,261
Obligations of state and political subdivisions	265,565		694		(4,852		)	261,407
Mortgage-backed securities:
Residential agency	3,654,417		68		(140,816		)	3,513,669
Commercial agency	721,899		—		(26,513		)	695,386
Other securities	126,098		—		(2,697		)	123,401
Total securities available for sale	$	4,808,975	$	767	$	(175,618	)	$	4,634,124
Securities held to maturity:
Obligations of state and political subdivisions	$	194,382	$	349	$	(5,277	)	$	189,454
Mortgage-backed securities:
Residential agency	19,179		28		(1,352		)	17,855
Total securities held to maturity	$	213,561	$	377	$	(6,629	)	$	207,309



	December 31, 2017
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities available for sale:
U.S. Government-sponsored enterprise obligations	$	41,003	$	18	$	(406	)	$	40,615
Obligations of state and political subdivisions	271,451		4,246		(1,493		)	274,204
Mortgage-backed securities:
Residential agency	3,675,367		1,233		(52,090		)	3,624,510
Commercial agency	546,105		228		(8,938		)	537,395
Other securities	114,005		247		(914		)	113,338
Total securities available for sale	$	4,647,931	$	5,972	$	(63,841	)	$	4,590,062
Securities held to maturity:
Obligations of state and political subdivisions	$	206,736	$	1,530	$	(275	)	$	207,991
Mortgage-backed securities:
Residential agency	20,582		41		(650		)	19,973
Total securities held to maturity	$	227,318	$	1,571	$	(925	)	$	227,964

Securities with carrying values of $2.3 billion were pledged to support repurchase transactions, public funds deposits and certain long-term borrowings at September 30, 2018 compared to $2.1 billion at December 31, 2017.

Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows:



	September 30, 2018
	Less Than Twelve Months					Twelve Months or More					Total
(Dollars in thousands)	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Securities available for sale:
U.S. Government-sponsored enterprise obligations	$	—		$	—	$	(740	)	$	39,259	$	(740	)	$	39,259
Obligations of state and political subdivisions	(839		)	107,014		(4,013		)	90,761		(4,852		)	197,775
Mortgage-backed securities:
Residential agency	(23,673		)	1,009,754		(117,143		)	2,482,730		(140,816		)	3,492,484
Commercial agency	(4,657		)	268,207		(21,856		)	418,295		(26,513		)	686,502
Other securities	(1,310		)	93,529		(1,387		)	29,872		(2,697		)	123,401
Total securities available for sale	$	(30,479	)	$	1,478,504	$	(145,139	)	$	3,060,917	$	(175,618	)	$	4,539,421

Securities held to maturity:
Obligations of state and political subdivisions	$	(3,725	)	$	115,138	$	(1,552	)	$	40,960	$	(5,277	)	$	156,098
Mortgage-backed securities:
Residential agency	—			—		(1,352		)	17,544		(1,352		)	17,544
Total securities held to maturity	$	(3,725	)	$	115,138	$	(2,904	)	$	58,504	$	(6,629	)	$	173,642



	December 31, 2017
	Less Than Twelve Months					Twelve Months or More					Total
(Dollars in thousands)	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Securities available for sale:
U.S. Government-sponsored enterprise obligations	$	(254	)	$	29,744	$	(152	)	$	9,848	$	(406	)	$	39,592
Obligations of state and political subdivisions	(326		)	31,601		(1,167		)	68,609		(1,493		)	100,210
Mortgage-backed securities:
Residential agency	(22,760		)	2,366,569		(29,330		)	1,061,588		(52,090		)	3,428,157
Commercial agency	(3,503		)	310,769		(5,435		)	164,470		(8,938		)	475,239
Other securities	(914		)	75,302		—			—		(914		)	75,302
Total securities available for sale	$	(27,757	)	$	2,813,985	$	(36,084	)	$	1,304,515	$	(63,841	)	$	4,118,500

Securities held to maturity:
Obligations of state and political subdivisions	$	(263	)	$	65,817	$	(12	)	$	3,031	$	(275	)	$	68,848
Mortgage-backed securities:
Residential agency	(2		)	333		(648		)	19,269		(650		)	19,602
Total securities held to maturity	$	(265	)	$	66,150	$	(660	)	$	22,300	$	(925	)	$	88,450

The Company assessed the nature of the unrealized losses in its portfolio as of September 30, 2018 and December 31, 2017 to determine if there are losses that should be deemed other-than-temporary. In its analysis of these securities, management considered numerous factors to determine whether there were instances where the amortized cost basis of the debt securities would not be fully recoverable, including, but not limited to:


•	The length of time and extent to which the estimated fair value of the securities was less than their amortized cost;


•	Whether adverse conditions were present in the operations, geographic area, or industry of the issuer;


•	The payment structure of the security, including scheduled interest and principal payments, the issuer’s failures to make scheduled payments, if any, and the likelihood of failure to make scheduled payments in the future;


•	Changes to the rating of the security by a rating agency; and


•	Subsequent recoveries or additional declines in fair value after the balance sheet date.

Management believes it has considered these factors, as well as all relevant information available, when determining the expected future cash flows of the securities in question. In each instance, management has determined the cost basis of the securities would be fully recoverable. Management also has the intent to hold debt securities until their maturity or anticipated recovery if the security is classified as available for sale. In addition, management does not believe the Company will be required to sell debt securities before the anticipated recovery of the amortized cost basis of the security. As a result of the Company's analysis, no declines in the estimated fair value of the Company's investment securities were deemed to be other-than-temporary at September 30, 2018 or December 31, 2017.

At September 30, 2018, 719 debt securities had unrealized losses of 3.72% of the securities’ amortized cost basis. At December 31, 2017, 544 debt securities had unrealized losses of 1.52% of the securities’ amortized cost basis. The unrealized losses for each of the securities related to market interest rate changes and not credit concerns of the issuers. Additional information on securities that have been in a continuous loss position for over twelve months at September 30, 2018 and December 31, 2017 is presented in the following table:



(Dollars in thousands)	September 30, 2018		December 31, 2017
Number of securities:
Mortgage-backed securities:
Residential agency	336		153
Commercial agency	65		28
Obligations of state and political subdivisions	53		28
U.S. Government-sponsored enterprise obligations	3		1
Other securities	7		—
	464		210
Amortized Cost Basis:
Mortgage-backed securities:
Residential agency	$	2,618,769	$	1,110,834
Commercial agency	440,151		169,905
Obligations of state and political subdivisions	137,286		72,820
U.S. Government-sponsored enterprise obligations	39,999		10,000
Other securities	31,259		—
	$	3,267,464	$	1,363,559
Unrealized Loss:
Mortgage-backed securities:
Residential agency	$	118,495	$	29,977
Commercial agency	21,856		5,435
Obligations of state and political subdivisions	5,565		1,180
U.S. Government-sponsored enterprise obligations	740		152
Other securities	1,387		—
	$	148,043	$	36,744

The Fannie Mae, Freddie Mac, and Ginnie Mae securities noted above carry a rating of AA+/Aaa by S&P and Moody's.

The amortized cost and estimated fair value of investment securities by maturity at September 30, 2018 are presented in the following table. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities. Weighted average yields are calculated on the basis of the yield to maturity based on the amortized cost of each security.



	Securities Available for Sale						Securities Held to Maturity
(Dollars in thousands)	Weighted Average Yield		Amortized Cost		Estimated Fair Value		Weighted Average Yield		Amortized Cost		Estimated Fair Value
Within one year or less	1.90	%	$	19,161	$	19,056	4.00	%	$	435	$	436
One through five years	2.25		150,119		147,472		2.80		8,776		8,751
After five through ten years	2.47		1,104,969		1,069,983		2.58		45,368		44,690
Over ten years	2.45		3,534,726		3,397,613		2.60		158,982		153,432
	2.44	%	$	4,808,975	$	4,634,124	2.61	%	$	213,561	$	207,309

The following is a summary of realized gains and losses from the sale of securities classified as available for sale. Gains or losses on securities sold are recorded on the trade date, using the specific identification method.



	Three Months Ended September 30,					Nine Months Ended September 30,
(Dollars in thousands)	2018		2017			2018			2017
Realized gains	$	—	$	667		$	39		$	909
Realized losses	—		(909		)	(95		)	(1,092		)
	$	—	$	(242	)	$	(56	)	$	(183	)

In addition to the gains above, the Company realized certain gains on calls of securities held to maturity that were not significant to the consolidated financial statements.

Other Equity Securities

The Company accounts for the following securities at cost less impairment plus or minus any observable price changes, which approximates fair value, with the exception of CRA and Community Development Investment Funds, which are recorded at fair value. Other Equity Securities, which are presented in “other assets” on the consolidated balance sheets, are as follows:



(Dollars in thousands)	September 30, 2018		December 31, 2017
Federal Home Loan Bank (FHLB) stock	$	102,508	$	95,171
Federal Reserve Bank (FRB) stock	85,630		79,191
CRA and Community Development Investment Funds	1,866		—
Other investments	9,838		3,008
	$	199,842	$	177,370