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Investment Securities | 12 Months Ended
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Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract] |
Investment Securities |
NOTE 3 – INVESTMENT SECURITIES
The following tables present the amortized cost and estimated fair values of investment securities, which were all classified as available for sale, as of December 31:
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
| (in thousands)
2016 |  |  |  |  |  |  |
U.S. Government sponsored agency securities | $ | 132 |  |  | $ | 2 |  |  | $ | — |  |  | $ | 134 |
State and municipal securities | 405,274 |  |  | 2,043 |  |  | (15,676 | ) |  | 391,641 |
Corporate debt securities | 112,016 |  |  | 1,978 |  |  | (4,585 | ) |  | 109,409 |
Collateralized mortgage obligations | 604,095 |  |  | 1,943 |  |  | (12,178 | ) |  | 593,860 |
Mortgage-backed securities | 1,353,292 |  |  | 6,546 |  |  | (17,437 | ) |  | 1,342,401 |
Auction rate securities | 107,215 |  |  | — |  |  | (9,959 | ) |  | 97,256 |
Total debt securities | 2,582,024 |  |  | 12,512 |  |  | (59,835 | ) |  | 2,534,701 |
Equity securities | 12,231 |  |  | 12,295 |  |  | — |  |  | 24,526 |
Total | $ | 2,594,255 |  |  | $ | 24,807 |  |  | $ | (59,835 | ) |  | $ | 2,559,227 |
2015 |  |  |  |  |  |  |
U.S. Government sponsored agency securities | $ | 25,154 |  |  | $ | 35 |  |  | $ | (53 | ) |  | $ | 25,136 |
State and municipal securities | 256,746 |  |  | 6,019 |  |  | — |  |  | 262,765 |
Corporate debt securities | 100,336 |  |  | 2,695 |  |  | (6,076 | ) |  | 96,955 |
Collateralized mortgage obligations | 835,439 |  |  | 3,042 |  |  | (16,972 | ) |  | 821,509 |
Mortgage-backed securities | 1,154,935 |  |  | 10,104 |  |  | (6,204 | ) |  | 1,158,835 |
Auction rate securities | 106,772 |  |  | — |  |  | (8,713 | ) |  | 98,059 |
Total debt securities | 2,479,382 |  |  | 21,895 |  |  | (38,018 | ) |  | 2,463,259 |
Equity securities | 14,677 |  |  | 6,845 |  |  | (8 | ) |  | 21,514 |
Total | $ | 2,494,059 |  |  | $ | 28,740 |  |  | $ | (38,026 | ) |  | $ | 2,484,773 |
Securities carried at $1.8 billion and $1.7 billion as of December 31, 2016 and 2015, respectively, were pledged as collateral to secure public and trust deposits and customer repurchase agreements. Equity securities include common stocks of financial institutions (estimated fair value of $23.5 million and $20.6 million at December 31, 2016 and 2015, respectively) and other equity investments (estimated fair value of $1.0 million and $914,000 at December 31, 2016 and 2015, respectively). As of December 31, 2016, the financial institutions stock portfolio had a cost basis of $11.5 million and an estimated fair value of $23.5 million, including an investment in a single financial institution with a cost basis of $5.8 million and an estimated fair value of $11.9 million. This investment accounted for 50.5% of the estimated fair value of the Corporation's investments in the common stocks of publicly traded financial institutions. No other investment in the financial institutions stock portfolio exceeded 10% of the portfolio's estimated fair value. The amortized cost and estimated fair values of debt securities as of December 31, 2016, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Amortized Cost |  | Estimated Fair Value
| (in thousands)
Due in one year or less | $ | 54,727 |  |  | $ | 55,027 |
Due from one year to five years | 28,720 |  |  | 29,342 |
Due from five years to ten years | 95,658 |  |  | 96,933 |
Due after ten years | 445,532 |  |  | 417,138 |
| 624,637 |  |  | 598,440 |
Collateralized mortgage obligations (1) | 604,095 |  |  | 593,860 |
Mortgage-backed securities (1) | 1,353,292 |  |  | 1,342,401 |
Total debt securities | $ | 2,582,024 |  |  | $ | 2,534,701 |
(1) | Maturities for mortgage-backed securities and collateralized mortgage obligations are dependent upon the interest rate environment and prepayments on the underlying loans.
The following table presents information related to gross gains and losses on the sales of equity and debt securities, and losses recognized for other-than-temporary impairment of investments:
| Gross Realized Gains |  | Gross Realized Losses |  | Other- than- temporary Impairment Losses |  | Net Gains
| (in thousands)
2016: |  |  |  |  |  |  |
Equity securities | $ | 2,005 |  |  | $ | (10 | ) |  | $ | — |  |  | $ | 1,995 |
Debt securities | 581 |  |  | (26 | ) |  | — |  |  | 555 |
Total | $ | 2,586 |  |  | $ | (36 | ) |  | $ | — |  |  | $ | 2,550 |
2015: |  |  |  |  |  |  |
Equity securities | $ | 6,496 |  |  | $ | (1 | ) |  | $ | — |  |  | $ | 6,495 |
Debt securities | 2,571 |  |  | — |  |  | — |  |  | 2,571 |
Total | $ | 9,067 |  |  | $ | (1 | ) |  | $ | — |  |  | $ | 9,066 |
2014: |  |  |  |  |  |  |
Equity securities | $ | 335 |  |  | $ | — |  |  | $ | (12 | ) |  | $ | 323 |
Debt securities | 2,058 |  |  | (322 | ) |  | (18 | ) |  | 1,718 |
Total | $ | 2,393 |  |  | $ | (322 | ) |  | $ | (30 | ) |  | $ | 2,041 |
There were no other-than-temporary impairment charges in 2016 or 2015. In 2014, there were $30,000 of other-than-temporary impairment charges, consisting of $12,000 of impairment charges on equity securities and $18,000 of charges on pooled trust preferred securities. The following table presents a summary of the cumulative credit related other-than-temporary impairment charges, recognized as components of earnings, for debt securities held by the Corporation at December 31:
| 2016 |  | 2015 |  | 2014
| (in thousands)
Balance of cumulative credit losses on debt securities, beginning of year | $ | (11,510 | ) |  | $ | (16,242 | ) |  | $ | (20,691 | )
Additions for credit losses recorded which were not previously recognized as components of earnings | — |  |  | — |  |  | (18 | )
Reductions for securities sold during the period | — |  |  | 4,730 |  |  | 4,460 |
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security | — |  |  | 2 |  |  | 7 |
Balance of cumulative credit losses on debt securities, end of year | $ | (11,510 | ) |  | $ | (11,510 | ) |  | $ | (16,242 | )
Other-than-temporary impairment charges related to investments in common stocks of financial institutions were due to the severity and duration of the declines in fair values of certain financial institution stocks, in conjunction with management’s assessment of the near-term prospects of each specific financial institution. The credit related other-than-temporary impairment charges for debt securities were determined based on expected cash flows models. The following table presents the gross unrealized losses and estimated fair values of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2016. There were no gross unrealized losses on equity securities as of December 31, 2016.
| Less Than 12 months |  | 12 Months or Longer |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
| (in thousands)
State and municipal securities | $ | 247,509 |  |  | $ | (15,676 | ) |  | $ | — |  |  | $ | — |  |  | $ | 247,509 |  |  | $ | (15,676 | )
Corporate debt securities | 11,922 |  |  | (110 | ) |  | 34,629 |  |  | (4,475 | ) |  | 46,551 |  |  | (4,585 | )
Collateralized mortgage obligations | 166,905 |  |  | (3,899 | ) |  | 258,237 |  |  | (8,279 | ) |  | 425,142 |  |  | (12,178 | )
Mortgage-backed securities | 1,137,510 |  |  | (17,437 | ) |  | — |  |  | — |  |  | 1,137,510 |  |  | (17,437 | )
Auction rate securities | — |  |  | — |  |  | 97,256 |  |  | (9,959 | ) |  | 97,256 |  |  | (9,959 | )
Total debt securities | 1,563,846 |  |  | (37,122 | ) |  | 390,122 |  |  | (22,713 | ) |  | 1,953,968 |  |  | (59,835 | )
For comparative purposes, the following table presents gross unrealized losses and the estimated fair value of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2015.
| Less Than 12 months |  | 12 Months or Longer |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
| (in thousands)
U.S. Government sponsored agency securities | $ | 9,957 |  |  | $ | (53 | ) |  | $ | — |  |  | $ | — |  |  | $ | 9,957 |  |  | $ | (53 | )
Corporate debt securities | 12,892 |  |  | (97 | ) |  | 33,036 |  |  | (5,979 | ) |  | 45,928 |  |  | (6,076 | )
Collateralized mortgage obligations | 166,007 |  |  | (1,467 | ) |  | 467,778 |  |  | (15,505 | ) |  | 633,785 |  |  | (16,972 | )
Mortgage-backed securities | 611,920 |  |  | (4,783 | ) |  | 63,818 |  |  | (1,421 | ) |  | 675,738 |  |  | (6,204 | )
Auction rate securities | — |  |  | — |  |  | 98,059 |  |  | (8,713 | ) |  | 98,059 |  |  | (8,713 | )
Total debt securities | 800,776 |  |  | (6,400 | ) |  | 662,691 |  |  | (31,618 | ) |  | 1,463,467 |  |  | (38,018 | )
Equity securities | — |  |  | — |  |  | 14 |  |  | (8 | ) |  | 14 |  |  | (8 | )
Total | $ | 800,776 |  |  | $ | (6,400 | ) |  | $ | 662,705 |  |  | $ | (31,626 | ) |  | $ | 1,463,481 |  |  | $ | (38,026 | )
The Corporation’s collateralized mortgage obligations and mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the decline in fair value of these securities is attributable to changes in interest rates and not credit quality, and because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation did not consider these investments to be other-than-temporarily impaired as of December 31, 2016. As of December 31, 2016, all student loan auction rate certificates ("ARCs") were current and making scheduled interest payments and were rated above investment grade, with approximately $5.5 million, or 6%, "AAA" rated and $91.8 million, or 94%, "AA" rated. All of the loans underlying the ARCs have principal payments which are guaranteed by the federal government. Based on management’s evaluations, ARCs with a fair value of $97.3 million were not subject to any other-than-temporary impairment charges as of December 31, 2016. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell these securities prior to a recovery of their fair value to amortized cost, which may be at maturity. The majority of the Corporation’s available for sale corporate debt securities are issued by financial institutions. The following table presents the amortized cost and estimated fair values of corporate debt securities as of December 31:
| 2016 |  | 2015
| Amortized Cost |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value
| (in thousands)
Single-issuer trust preferred securities | $ | 43,746 |  |  | $ | 39,829 |  |  | $ | 44,648 |  |  | $ | 39,106 |
Subordinated debt | 46,231 |  |  | 46,723 |  |  | 39,610 |  |  | 40,779 |
Senior debt | 18,037 |  |  | 18,433 |  |  | 12,043 |  |  | 12,329 |
Pooled trust preferred securities | — |  |  | 422 |  |  | — |  |  | 706 |
Corporate debt securities issued by financial institutions | 108,014 |  |  | 105,407 |  |  | 96,301 |  |  | 92,920 |
Other corporate debt securities | 4,002 |  |  | 4,002 |  |  | 4,035 |  |  | 4,035 |
Available for sale corporate debt securities | $ | 112,016 |  |  | $ | 109,409 |  |  | $ | 100,336 |  |  | $ | 96,955 |
Single-issuer trust preferred securities had an unrealized loss of $3.9 million as of December 31, 2016. Six of the 19 single-issuer trust preferred securities held were rated below investment grade by at least one ratings agency, with an amortized cost of $11.5 million and an estimated fair value of $10.0 million as of December 31, 2016. All of the single-issuer trust preferred securities rated below investment grade were rated "BB" or "Ba." Two single-issuer trust preferred securities with an amortized cost of $3.7 million and an estimated fair value of $2.5 million as of December 31, 2016 were not rated by any ratings agency. Based on management's evaluations, corporate debt securities with a fair value of $109.4 million were not subject to any additional other-than-temporary impairment charges as of December 31, 2016. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

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