Debt and Equity Securities

The Company’s investments in equity securities that have readily determinable fair values and all investments in debt securities are classified in

one

of the following

three

categories and accounted for accordingly: (

) trading securities, (

) securities available for sale and (

) securities held-to-maturity.

The Company did

not

hold any trading securities at

June 30, 2017

and

December 31, 2016.

Securities available for sale are recorded at fair value. Securities held-to-maturity are recorded at amortized cost.

The following table summarizes the Company’s portfolio of securities held-to-maturity at

June 30, 2017:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
Securities held-to-maturity:
Municipals	$	24,451	$	22,777	$	-	$	1,674

Total other securities		24,451		22,777		-		1,674

FNMA		7,983		7,816		-		167

Total mortgage-backed securities		7,983		7,816		-		167
Total	$	32,434	$	30,593	$	-	$	1,841

The following table summarizes the Company’s portfolio of securities held-to-maturity at

December 31, 2016:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
Securities held-to-maturity:
Municipals	$	37,735	$	35,408	$	-	$	2,327

Total	$	37,735	$	35,408	$	-	$	2,327

The following table summarizes the Company’s portfolio of securities available for sale at

June 30, 2017:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
Securities available for sale:	(In thousands)
Corporate	$	110,000	$	103,191	$	-	$	6,809
Municipals		123,606		126,596		2,990		-
Mutual funds		21,563		21,563		-		-
Collateralized loan obligations		58,379		58,899		520		-
Other		7,444		7,444		-		-
Total other securities		320,992		317,693		3,510		6,809
REMIC and CMO		409,049		408,926		2,248		2,371
GNMA		1,153		1,248		95		-
FNMA		105,011		104,736		540		815
FHLMC		5,131		5,102		24		53
Total mortgage-backed securities		520,344		520,012		2,907		3,239
Total	$	841,336	$	837,705	$	6,417	$	10,048

The following table summarizes the Company’s portfolio of securities available for sale at

December 31, 2016:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
Securities available for sale:	(In thousands)
Corporate	$	110,000	$	102,910	$	-	$	7,090
Municipals		124,984		126,903		1,983		64
Mutual funds		21,366		21,366		-		-
Collateralized loan obligations		85,470		86,365		895		-
Other		7,363		7,361		-		2
Total other securities		349,183		344,905		2,878		7,156
REMIC and CMO		402,636		401,370		1,607		2,873
GNMA		1,319		1,427		108		-
FNMA		109,493		108,351		463		1,605
FHLMC		5,378		5,328		35		85
Total mortgage-backed securities		518,826		516,476		2,213		4,563
Total	$	868,009	$	861,381	$	5,091	$	11,719

Mortgage-backed securities shown in the table above include

one

private issue CMO that is collateralized by commercial real estate mortgages with an amortized cost and market value of

$0.1

million and

$0.2

million at

June 30, 2017

and

December 31, 2016,

respectively.

The corporate securities held by the Company at

June 30, 2017

and

December 31, 2016

are issued by U.S. banking institutions.

The following tables detail the amortized cost and fair value of the Company’s securities classified as held-to-maturity and available for sale at

June 30, 2017

by contractual maturity. 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.

	Amortized
Securities held-to-maturity:	Cost		Fair Value
	(In thousands)

Due in one year or less	$	2,585	$	2,585
Due after ten years		21,866		20,192

Total other securities		24,451		22,777
Mortgage-backed securities		7,983		7,816

Total	$	32,434	$	30,593

	Amortized
Securities available for sale:	Cost		Fair Value
	(In thousands)

Due in one year or less	$	-	$	-
Due after one year through five years		1,751		1,762
Due after five years through ten years		123,872		120,810
Due after ten years		173,806		173,558
Mutual funds		21,563		21,563

Total other securities		320,992		317,693
Mortgage-backed securities		520,344		520,012

Total	$	841,336	$	837,705

The following tables show the Company’s securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at the dates indicated:

	At June 30, 2017
			Total				Less than 12 months				12 months or more
					Unrealized				Unrealized				Unrealized
	Count		Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)

Held-to-maturity securities
Municipals		1	$	20,192	$	1,674	$	20,192	$	1,674	$	-	$	-
Total other securities		1		20,192		1,674		20,192		1,674		-		-

FNMA		1		7,816		167		7,816		167		-		-
Total mortgage-backed securities		1		7,816		167		7,816		167		-		-
Total		2	$	28,008	$	1,841	$	28,008	$	1,841	$	-	$	-


Available for sale securities
Corporate		14	$	103,191	$	6,809	$	9,475	$	525	$	93,716	$	6,284
Total other securities		14		103,191		6,809		9,475		525		93,716		6,284

REMIC and CMO		31		188,993		2,371		176,158		1,815		12,835		556
FNMA		14		52,826		815		47,153		605		5,673		210
FHLMC		1		3,981		53		3,981		53		-		-
Total mortgage-backed securities		46		245,800		3,239		227,292		2,473		18,508		766
Total		60	$	348,991	$	10,048	$	236,767	$	2,998	$	112,224	$	7,050

	At December 31, 2016
			Total				Less than 12 months				12 months or more
					Unrealized				Unrealized				Unrealized
	Count		Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)

Held-to-maturity securities
Municipals		1	$	19,538	$	2,327	$	19,538	$	2,327	$	-	$	-
Total		1	$	19,538	$	2,327	$	19,538	$	2,327	$	-	$	-

Available for sale securities
Corporate		14	$	102,910	$	7,090	$	28,476	$	1,524	$	74,434	$	5,566
Municipals		4		16,047		64		16,047		64		-		-
Other		1		298		2		-		-		298		2
Total other securities		19		119,255		7,156		44,523		1,588		74,732		5,568

REMIC and CMO		35		222,807		2,873		208,827		2,268		13,980		605
FNMA		18		80,924		1,605		74,972		1,250		5,952		355
FHLMC		1		3,993		85		3,993		85		-		-
Total mortgage-backed securities		54		307,724		4,563		287,792		3,603		19,932		960
Total		73	$	426,979	$	11,719	$	332,315	$	5,191	$	94,664	$	6,528

OTTI losses on impaired securities must be fully recognized in earnings if an investor has the intent to sell the debt security or if it is more likely than

not

that the investor will be required to sell the debt security before recovery of its amortized cost. However, even if an investor does

not

expect to sell a debt security in an unrealized loss position, the investor must evaluate the expected cash flows to be received and determine if a credit loss has occurred. In the event that a credit loss has occurred, only the amount of impairment associated with the credit loss is recognized in earnings in the Consolidated Statements of Income. Amounts relating to factors other than credit losses are recorded in accumulated other comprehensive loss (“AOCL”) within Stockholders’ Equity. Unrealized losses on available for sale securities, that are deemed to be temporary, are recorded in AOCL, net of tax.

The Company reviewed each investment that had an unrealized loss at

June 30, 2017

and

December 31, 2016.

The unrealized losses in FNMA securities held-to-maturity at

June 30, 2017

were caused by movements in interest rates. The unrealized losses in municipal securities held-to-maturity at

June 30, 2017

and

December 31, 2016

were caused by illiquidity in the market and movements in interest rates. The unrealized losses in securities available for sale at

June 30, 2017

and

December 31, 2016

were caused by movements in interest rates.

It is

not

anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does

not

have the intent to sell these securities and it is more likely than

not

the Company will

not

be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations,

none

of which the Company believes would cause the sale of the securities. Therefore, the Company did

not

consider these investments to be other-than-temporarily impaired at

June 30, 2017

and

December 31, 2016.

Realized gains and losses on the sales of securities are determined using the specific identification method. The Company sold available for sale securities totaling

$64.6

million during the

three

and

six

months ended

June 30, 2016.

The Company did

not

sell any securities available for sale during the

three

and

six

months ended

June 30, 2017.

The following table represents the gross gains and gross losses realized from the sale of securities available for sale for the periods indicated:

	For the three months ended					For the six months ended
	June 30,					June 30,
	2017		2016			2017		2016
	(In thousands)
Gross gains from the sale of securities	$	-	$	2,370		$	-	$	2,370
Gross losses from the sale of securities		-		(7	)		-		(7	)

Net gains from the sale of securities	$	-	$	2,363		$	-	$	2,363