5.	INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities are summarized below. The majority of securities held are available-for-sale securities with fair value based on quoted prices for similar assets in active markets or quoted prices for identical assets in markets that are not active. Estimated fair values were obtained from an independent pricing service based upon market quotes.


	June 30, 2018
	Amortized Cost		Gross Unrealized Holding Gain		Gross Unrealized Holding Loss			Fair Value		Total Percent
	(Dollars in thousands)
Investment securities available-for-sale:
Residential mortgage-backed securities	$	1,665,717	$	1,489	$	(30,322	)	$	1,636,884		84.81	%
CMO/REMIC - residential		244,227		357		(5,073	)		239,511		12.41	%
Municipal bonds		53,557		400		(1,108	)		52,849		2.74	%
Other securities		750		-		-			750		0.04	%

Total available-for-sale securities	$	1,964,251	$	2,246	$	(36,503	)	$	1,929,994		100.00	%

Investment securities held-to-maturity:
Government agency/GSE	$	149,693	$	406	$	(2,948	)	$	147,151		19.38	%
Residential mortgage-backed securities		164,914		-		(4,020	)		160,894		21.35	%
CMO		219,159		-		(12,773	)		206,386		28.37	%
Municipal bonds		238,703		574		(6,119	)		233,158		30.90	%

Total held-to-maturity securities	$	772,469	$	980	$	(25,860	)	$	747,589		100.00	%


	December 31, 2017
	Amortized Cost		Gross Unrealized Holding Gain		Gross Unrealized Holding Loss			Fair Value		Total Percent
	(Dollars in thousands)
Investment securities available-for-sale:
Residential mortgage-backed securities	$	1,747,780	$	11,231	$	(8,102	)	$	1,750,909		84.14	%
CMO/REMIC - residential		274,634		1,277		(2,082	)		273,829		13.16	%
Municipal bonds		54,966		774		(244	)		55,496		2.66	%
Other securities		751		-		-			751		0.04	%

Total available-for-sale securities	$	2,078,131	$	13,282	$	(10,428	)	$	2,080,985		100.00	%

Investment securities held-to-maturity:
Government agency/GSE	$	159,716	$	854	$	(2,134	)	$	158,436		19.25	%
Residential mortgage-backed securities		176,427		667		(382	)		176,712		21.26	%
CMO		225,072		-		(8,641	)		216,431		27.12	%
Municipal bonds		268,675		2,751		(3,790	)		267,636		32.37	%

Total held-to-maturity securities	$	829,890	$	4,272	$	(14,947	)	$	819,215		100.00	%

The following table provides information about the amount of interest income earned on investment securities which is fully taxable and which is exempt from regular federal income tax.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017

	(Dollars in thousands)
Investment securities available-for-sale:
Taxable	$	11,290	$	12,420	$	22,735	$	24,346
Tax-advantaged		407		587		830		1,301

Total interest income from available-for-sale securities		11,697		13,007		23,565		25,647

Investment securities held-to-maturity:
Taxable		3,048		3,203		5,926		6,480
Tax-advantaged		1,759		2,120		3,646		4,350

Total interest income from held-to-maturity securities		4,807		5,323		9,572		10,830

Total interest income from investment securities	$	16,504	$	18,330	$	33,137	$	36,477

Approximately 89% of the total investment securities portfolio at June 30, 2018 represents securities issued by the U.S government or U.S. government-sponsored enterprises, with the implied guarantee of payment of principal and interest.

The tables below show the Company’s investment securities’ gross unrealized losses and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2018 and December 31, 2017. Management has reviewed individual securities to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. The unrealized losses on these securities were primarily attributed to changes in interest rates. The issuers of these securities have not, to our knowledge, evidenced any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market rates have fluctuated. However, we have the ability to hold and do not have the intent to sell these securities. As such, management does not deem these securities to be Other-Than-Temporarily-Impaired (“OTTI”).


	June 30, 2018
	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses
	(Dollars in thousands)
Investment securities available-for-sale:
Residential mortgage-backed securities	$	1,253,569	$	(18,601	)	$	272,657	$	(11,721	)	$	1,526,226	$	(30,322	)
CMO/REMIC - residential		130,072		(2,291	)		64,326		(2,782	)		194,398		(5,073	)
Municipal bonds		9,294		(221	)		13,304		(887	)		22,598		(1,108	)

Total available-for-sale securities	$	1,392,935	$	(21,113	)	$	350,287	$	(15,390	)	$	1,743,222	$	(36,503	)

Investment securities held-to-maturity:
Government agency/GSE	$	53,518	$	(437	)	$	41,567	$	(2,511	)	$	95,085	$	(2,948	)
Residential mortgage-backed securities		106,204		(2,225	)		54,691		(1,795	)		160,895		(4,020	)
CMO		-		-			206,386		(12,773	)		206,386		(12,773	)
Municipal bonds		91,541		(1,499	)		61,207		(4,620	)		152,748		(6,119	)

Total held-to-maturity securities	$	251,263	$	(4,161	)	$	363,851	$	(21,699	)	$	615,114	$	(25,860	)


	December 31, 2017
	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses
	(Dollars in thousands)
Investment securities available-for-sale:
Residential mortgage-backed securities	$	414,091	$	(1,828	)	$	303,746	$	(6,274	)	$	717,837	$	(8,102	)
CMO/REMIC - residential		95,137		(487	)		71,223		(1,595	)		166,360		(2,082	)
Municipal bonds		946		(4	)		13,956		(240	)		14,902		(244	)

Total available-for-sale securities	$	510,174	$	(2,319	)	$	388,925	$	(8,109	)	$	899,099	$	(10,428	)

Investment securities held-to-maturity:
Government agency/GSE	$	18,950	$	(27	)	$	43,495	$	(2,107	)	$	62,445	$	(2,134	)
Residential mortgage-backed securities		51,297		(188	)		55,306		(194	)		106,603		(382	)
CMO		-		-			216,431		(8,641	)		216,431		(8,641	)
Municipal bonds		32,069		(492	)		66,217		(3,298	)		98,286		(3,790	)

Total held-to-maturity securities	$	102,316	$	(707	)	$	381,449	$	(14,240	)	$	483,765	$	(14,947	)

At June 30, 2018 and December 31, 2017, investment securities having a carrying value of approximately $1.74 billion and $1.91 billion, respectively, were pledged to secure public deposits, short and long-term borrowings, and for other purposes as required or permitted by law.

The amortized cost and fair value of debt securities at June 30, 2018, by contractual maturity, are shown in the table below. Although mortgage-backed and CMO/REMIC securities have contractual maturities through 2057, expected maturities will differ from contractual maturities because borrowers may have the right to prepay such obligations without penalty. Mortgage-backed and CMO/REMIC securities are included in maturity categories based upon estimated average lives which incorporate estimated prepayment speeds.


	June 30, 2018
	Available-for-sale				Held-to-maturity
	Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	26,487	$	26,762	$	-	$	-
Due after one year through five years		1,711,078		1,682,200		283,278		270,230
Due after five years through ten years		197,590		192,738		209,623		205,138
Due after ten years		29,096		28,294		279,568		272,221

Total investment securities	$	1,964,251	$	1,929,994	$	772,469	$	747,589

The investment in FHLB stock is periodically evaluated for impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. No impairment losses have been recorded through June 30, 2018.