NOTE

INVESTMENT SECURITIES

The amortized cost and fair value of investment securities that are classified as held-to-maturity and available-for-sale are as follows:

	Years Ended December 31
	2016									2015
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value

Held-to-Maturity

U.S. Government agencies	$	76,875	$	107	$	(182	)	$	76,800	$	237,139	$	582	$	(1,395	)	$	236,326
Mortgage-backed securities		19,773		63		(249	)		19,587		24,774		86		(290	)		24,570
State and political subdivisions		362,532		4,967		(842	)		366,657		440,676		9,138		(123	)		449,691
Other securities		2,916		--		--			2,916		2,784		--		--			2,784

Total	$	462,096	$	5,137	$	(1,273	)	$	465,960	$	705,373	$	9,806	$	(1,808	)	$	713,371

Available-for-Sale

U.S. Treasury	$	300	$	--	$	--		$	300	$	4,000	$	--	$	(6	)	$	3,994
U.S. Government agencies		140,005		67		(2,301	)		137,771		121,017		118		(898	)		120,237
Mortgage-backed securities		885,783		178		(17,637	)		868,324		650,619		937		(4,130	)		647,426
State and political subdivisions		108,374		38		(5,469	)		102,943		9,762		112		--			9,874
Other securities		47,022		996		(2	)		48,016		39,594		420		(138	)		39,876

Total	$	1,181,484	$	1,279	$	(25,409	)	$	1,157,354	$	824,992	$	1,587	$	(5,172	)	$	821,407

Securities with limited marketability, such as stock in the Federal Reserve Bank and the Federal Home Loan Bank, are carried at cost and are reported as other available-for-sale securities in the table above.

Certain investment securities are valued at less than their historical cost. Total fair value of these investments at

December

31,

2016

and

2015,

was

$1.2

billion and

$872.4

million, which is approximately

75.7%

and

57.1%,

respectively, of the Company’s combined available-for-sale and held-to-maturity investment portfolios.

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at

December

31:

	Less Than 12 Months				12 Months or More				Total
(In thousands)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
December 31, 2016

Held-to-Maturity

U.S. Government agencies	$	32,859	$	141	$	19,959	$	41	$	52,818	$	182
Mortgage-backed securities		11,833		205		1,465		44		13,298		249
State and political subdivisions		104,974		841		330		1		105,304		842

Total	$	149,666	$	1,187	$	21,754	$	86	$	171,420	$	1,273

Available-for-Sale

U.S. Government agencies	$	126,325	$	2,301	$	--	$	--	$	126,325	$	2,301
Mortgage-backed securities		833,393		17,637		--		--		833,393		17,637
State and political subdivisions		94,922		5,469		--		--		94,922		5,469
Other securities		99		2		--		--		99		2

Total	$	1,054,739	$	25,409	$	--	$	--	$	1,054,739	$	25,409

December 31, 2015

Held-to-Maturity

U.S. Government agencies	$	107,758	$	567	$	79,166	$	828	$	186,924	$	1,395
Mortgage-backed securities		7,958		94		8,144		196		16,102		290
State and political subdivisions		27,866		100		3,946		23		31,812		123

Total	$	143,582	$	761	$	91,256	$	1,047	$	234,838	$	1,808

Available-for-Sale

U.S. Treasury	$	3,994	$	6	$	--	$	--	$	3,994	$	6
U.S. Government agencies		62,473		317		46,023		581		108,496		898
Mortgage-backed securities		523,185		4,130		--		--		523,185		4,130
State and political subdivisions		281		--		--		--		281		--
Other securities		1,060		137		510		1		1,570		138

Total	$	590,993	$	4,590	$	46,533	$	582	$	637,526	$	5,172

These declines primarily resulted from the rate for these investments yielding less than current market rates. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. Management does not have the intent to sell these securities and management believes it is more likely than not the Company will not have to sell these securities before recovery of their amortized cost basis less any current period credit losses.

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company expects to receive full value for the securities. Furthermore, as of

December

31,

2016,

management also had the ability and intent to hold the securities classified as available-for-sale for a period of time sufficient for a recovery of cost. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of

December

31,

2016,

management believes the impairments detailed in the table above are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

Income earned on the above securities for the years ended

December

31,

2016,

2015

and

2014,

is as follows:

(In thousands)	2016		2015		2014

Taxable
Held-to-maturity	$	3,778	$	5,162	$	5,839
Available-for-sale		17,928		12,129		2,785

Non-taxable
Held-to-maturity		10,641		11,635		10,625
Available-for-sale		1,132		1,687		108

Total	$	33,479	$	30,613	$	19,357

The amortized cost and estimated fair value by maturity of securities are shown 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.

	Held-to-Maturity				Available-for-Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value

One year or less	$	52,055	$	52,034	$	1,552	$	1,552
After one through five years		122,870		123,029		96,774		95,688
After five through ten years		105,482		106,097		12,756		12,539
After ten years		161,916		165,213		138,697		132,335
Securities not due on a single maturity date		19,773		19,587		885,783		868,324
Other securities (no maturity)		--		--		45,922		46,916

Total	$	462,096	$	465,960	$	1,181,484	$	1,157,354

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to

$915.2

million at

December

31,

2016

and

$840.4

million at

December

31,

2015.

The book value of securities sold under agreements to repurchase amounted to

$102.4

million and

$96.8

million for

December

31,

2016

and

2015,

respectively.

There were

$5.8

million of gross realized gains and

realized losses from the sale of available for sale securities during the year ended

December

31,

2016.

There were

$350,000

of gross realized gains and

$43,000

of realized losses from the sale of available for sale securities during the year ended

December

31,

2015.

There were

$199,000

of gross realized gains and

$191,000

of realized losses from the sale of available for sale securities during the year ended

December

31,

2014.

The income tax expense/benefit related to security gains/losses was

39.225%

of the gross amounts.

The state and political subdivision debt obligations are primarily non-rated bonds and representing small issuances, primarily in Arkansas, Missouri, Tennessee and Texas, which are evaluated on an ongoing basis.