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SECURITIES | 6 Months Ended
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Jun. 30, 2016
SECURITIES |
SECURITIES | 4. SECURITIES The following table summarizes the amortized cost and fair value of the available for sale and held to maturity investment securities portfolio at June 30, 2016 and December 31, 2015 and the corresponding amounts of unrealized gains and losses therein:
|  | June 30, 2016 |
|  |  |  |  | Gross |  |  | Gross |  |  | Estimated |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  | $ | 58,242 |  |  | $ | 84 |  |  | $ | (1 | ) |  | $ | 58,325 |
State and municipal obligations |  |  | 108,184 |  |  |  | 2,400 |  |  |  | (28 | ) |  |  | 110,556 |
U.S. GSE residential mortgage-backed securities |  |  | 100,685 |  |  |  | 1,393 |  |  |  | (4 | ) |  |  | 102,074 |
U.S. GSE residential collateralized mortgage obligations |  |  | 236,771 |  |  |  | 1,962 |  |  |  | (135 | ) |  |  | 238,598 |
U.S. GSE commercial mortgage-backed securities |  |  | 6,488 |  |  |  | 213 |  |  |  | - |  |  |  | 6,701 |
U.S. GSE commercial collateralized mortgage obligations |  |  | 56,412 |  |  |  | 546 |  |  |  | (47 | ) |  |  | 56,911 |
Other asset backed securities |  |  | 24,250 |  |  |  | - |  |  |  | (1,940 | ) |  |  | 22,310 |
Corporate bonds |  |  | 32,000 |  |  |  | 285 |  |  |  | (677 | ) |  |  | 31,608 |
Total available for sale |  |  | 623,032 |  |  |  | 6,883 |  |  |  | (2,832 | ) |  |  | 627,083 |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
State and municipal obligations |  |  | 61,159 |  |  |  | 3,294 |  |  |  | - |  |  |  | 64,453 |
U.S. GSE residential mortgage-backed securities |  |  | 11,837 |  |  |  | 107 |  |  |  | - |  |  |  | 11,944 |
U.S. GSE residential collateralized mortgage obligations |  |  | 66,219 |  |  |  | 1,937 |  |  |  | (33 | ) |  |  | 68,123 |
U.S. GSE commercial mortgage-backed securities |  |  | 29,119 |  |  |  | 912 |  |  |  | (53 | ) |  |  | 29,978 |
U.S. GSE commercial collateralized mortgage obligations |  |  | 42,724 |  |  |  | 974 |  |  |  | (51 | ) |  |  | 43,647 |
Corporate bonds |  |  | 11,000 |  |  |  | 29 |  |  |  | - |  |  |  | 11,029 |
Total held to maturity |  |  | 222,058 |  |  |  | 7,253 |  |  |  | (137 | ) |  |  | 229,174 |
Total securities |  | $ | 845,090 |  |  | $ | 14,136 |  |  | $ | (2,969 | ) |  | $ | 856,257 |
|  | December 31, 2015 |
|  |  |  |  | Gross |  |  | Gross |  |  | Estimated |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  | $ | 63,238 |  |  | $ | - |  |  | $ | (564 | ) |  | $ | 62,674 |
State and municipal obligations |  |  | 87,830 |  |  |  | 427 |  |  |  | (322 | ) |  |  | 87,935 |
U.S. GSE residential mortgage-backed securities |  |  | 201,297 |  |  |  | 237 |  |  |  | (1,270 | ) |  |  | 200,264 |
U.S. GSE residential collateralized mortgage obligations |  |  | 321,253 |  |  |  | 513 |  |  |  | (3,888 | ) |  |  | 317,878 |
U.S. GSE commercial mortgage-backed securities |  |  | 12,491 |  |  |  | 7 |  |  |  | (80 | ) |  |  | 12,418 |
U.S. GSE commercial collateralized mortgage obligations |  |  | 64,809 |  |  |  | 9 |  |  |  | (620 | ) |  |  | 64,198 |
Other asset backed securities |  |  | 24,250 |  |  |  | - |  |  |  | (1,879 | ) |  |  | 22,371 |
Corporate bonds |  |  | 33,000 |  |  |  | - |  |  |  | (535 | ) |  |  | 32,465 |
Total available for sale |  |  | 808,168 |  |  |  | 1,193 |  |  |  | (9,158 | ) |  |  | 800,203 |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  | $ | 7,466 |  |  | $ | 1 |  |  | $ | - |  |  | $ | 7,467 |
State and municipal obligations |  |  | 64,878 |  |  |  | 1,715 |  |  |  | (113 | ) |  |  | 66,480 |
U.S. GSE residential mortgage-backed securities |  |  | 7,609 |  |  |  | - |  |  |  | (106 | ) |  |  | 7,503 |
U.S. GSE residential collateralized mortgage obligations |  |  | 60,933 |  |  |  | 617 |  |  |  | (498 | ) |  |  | 61,052 |
U.S. GSE commercial mortgage-backed securities |  |  | 23,056 |  |  |  | 210 |  |  |  | (313 | ) |  |  | 22,953 |
U.S. GSE commercial collateralized mortgage obligations |  |  | 33,409 |  |  |  | 282 |  |  |  | (185 | ) |  |  | 33,506 |
Corporate bonds |  |  | 11,000 |  |  |  | 42 |  |  |  | - |  |  |  | 11,042 |
Total held to maturity |  |  | 208,351 |  |  |  | 2,867 |  |  |  | (1,215 | ) |  |  | 210,003 |
Total securities |  | $ | 1,016,519 |  |  | $ | 4,060 |  |  | $ | (10,373 | ) |  | $ | 1,010,206 |
The following table summarizes the amortized cost, fair value and maturities of the available for sale and held to maturity investment securities portfolio at June 30, 2016. 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.
|  | June 30, 2016 |
|  | Amortized |  |  | Fair |
(In thousands) |  | Cost |  |  | Value |
Maturity |  |  |  |  |  |  |  |
Available for sale: |  |  |  |  |  |  |  |
Within one year |  | $ | 14,277 |  |  | $ | 14,315 |
One to five years |  |  | 74,503 |  |  |  | 75,060 |
Five to ten years |  |  | 116,129 |  |  |  | 117,641 |
Beyond ten years |  |  | 418,123 |  |  |  | 420,067 |
Total |  | $ | 623,032 |  |  | $ | 627,083 |
Held to maturity: |  |  |  |  |  |  |  |
Within one year |  | $ | 3,644 |  |  | $ | 3,665 |
One to five years |  |  | 31,697 |  |  |  | 32,326 |
Five to ten years |  |  | 67,599 |  |  |  | 71,025 |
Beyond ten years |  |  | 119,118 |  |  |  | 122,158 |
Total |  | $ | 222,058 |  |  | $ | 229,174 |
Securities with unrealized losses at June 30, 2016 and December 31, 2015, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
|  | June 30, 2016 |
|  | Less than 12 months |  |  | Greater than 12 months |
|  |  |  |  | Unrealized |  |  |  |  |  | Unrealized |
(In thousands) |  | Fair Value |  |  | Losses |  |  | Fair Value |  |  | Losses |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  | $ | 7,999 |  |  | $ | (1 | ) |  | $ | - |  |  | $ | - |
State and municipal obligations |  |  | 9,853 |  |  |  | (27 | ) |  |  | 243 |  |  |  | (1 | )
U.S. GSE residential mortgage-backed securities |  |  | - |  |  |  | - |  |  |  | 1,782 |  |  |  | (4 | )
U.S. GSE residential collateralized mortgage obligations |  |  | 10,183 |  |  |  | (48 | ) |  |  | 17,812 |  |  |  | (87 | )
U.S. GSE commercial mortgage-backed securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
U.S. GSE commercial collateralized mortgage obligations |  |  | 8,644 |  |  |  | (22 | ) |  |  | 5,706 |  |  |  | (25 | )
Other asset backed securities |  |  | - |  |  |  | - |  |  |  | 22,310 |  |  |  | (1,940 | )
Corporate bonds |  |  | 17,406 |  |  |  | (594 | ) |  |  | 4,918 |  |  |  | (83 | )
Total available for sale |  | $ | 54,085 |  |  | $ | (692 | ) |  | $ | 52,771 |  |  | $ | (2,140 | )
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
State and municipal obligations |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
U.S. GSE residential mortgage-backed securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
U.S. GSE residential collateralized mortgage obligations |  |  | 218 |  |  |  | - |  |  |  | 4,457 |  |  |  | (33 | )
U.S. GSE commercial mortgage-backed securities |  |  | 6,201 |  |  |  | (53 | ) |  |  | - |  |  |  | - |
U.S. GSE commercial collateralized mortgage obligations |  |  | 4,899 |  |  |  | (30 | ) |  |  | 3,969 |  |  |  | (21 | )
Corporate bonds |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total held to maturity |  | $ | 11,318 |  |  | $ | (83 | ) |  | $ | 8,426 |  |  | $ | (54 | )
|  | December 31, 2015 |
|  | Less than 12 months |  |  | Greater than 12 months |
|  |  |  |  | Unrealized |  |  |  |  |  | Unrealized |
(In thousands) |  | Fair Value |  |  | Losses |  |  | Fair Value |  |  | Losses |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  | $ | 37,759 |  |  | $ | (235 | ) |  | $ | 24,914 |  |  | $ | (329 | )
State and municipal obligations |  |  | 39,621 |  |  |  | (298 | ) |  |  | 5,118 |  |  |  | (24 | )
U.S. GSE residential mortgage-backed securities |  |  | 136,025 |  |  |  | (1,224 | ) |  |  | 1,510 |  |  |  | (46 | )
U.S. GSE residential collateralized mortgage obligations |  |  | 187,543 |  |  |  | (1,781 | ) |  |  | 66,830 |  |  |  | (2,107 | )
U.S. GSE commercial mortgage-backed securities |  |  | 8,594 |  |  |  | (80 | ) |  |  | - |  |  |  | - |
U.S. GSE commercial collateralized mortgage obligations |  |  | 51,178 |  |  |  | (503 | ) |  |  | 10,034 |  |  |  | (117 | )
Other asset backed securities |  |  | - |  |  |  | - |  |  |  | 22,371 |  |  |  | (1,879 | )
Corporate bonds |  |  | 27,640 |  |  |  | (360 | ) |  |  | 4,825 |  |  |  | (175 | )
Total available for sale |  | $ | 488,360 |  |  | $ | (4,481 | ) |  | $ | 135,602 |  |  | $ | (4,677 | )
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. GSE securities |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
State and municipal obligations |  |  | 18,375 |  |  |  | (113 | ) |  |  | - |  |  |  | - |
U.S. GSE residential mortgage-backed securities |  |  | 7,503 |  |  |  | (106 | ) |  |  | - |  |  |  | - |
U.S. GSE residential collateralized mortgage obligations |  |  | 15,918 |  |  |  | (149 | ) |  |  | 15,679 |  |  |  | (349 | )
U.S. GSE commercial mortgage-backed securities |  |  | 13,982 |  |  |  | (313 | ) |  |  | - |  |  |  | - |
U.S. GSE commercial collateralized mortgage obligations |  |  | 7,912 |  |  |  | (8 | ) |  |  | 3,813 |  |  |  | (177 | )
Corporate bonds |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total held to maturity |  | $ | 63,690 |  |  | $ | (689 | ) |  | $ | 19,492 |  |  | $ | (526 | )
Other-Than-Temporary Impairment Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available for sale or held to maturity are generally evaluated for OTTI under FASB ASC 320, Accounting for Certain Investments in Debt and Equity Securities. In determining OTTI under the FASB ASC 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. At June 30, 2016, the majority of unrealized losses on the available for sale securities are related to the Company’s other asset backed securities and corporate bonds. The decrease in fair value of the other asset backed securities and corporate bonds is attributable to changes in interest rates and not credit quality. The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at June 30, 2016. There were $235.7 million of proceeds from sales of securities with gross gains of approximately $1.3 million and gross losses of approximately $0.9 million realized for the three months ended June 30, 2016. There were $264.4 million of proceeds from sales of securities with gross gains of approximately $1.6 million and gross losses of approximately $1.2 million realized for the six months ended June 30, 2016. There were no sales of securities during the three months ended June 30, 2015. There were $73.8 million of proceeds from sales of securities with gross gains of approximately $0.5 million and gross losses of approximately $0.5 million realized for the six months ended June 30, 2015. Proceeds from calls of securities were $22.3 million and $53.0 million for the three and six months ended June 30, 2016, respectively. Proceeds from calls of securities were $10.3 million and $10.5 million for the three and six months ended June 30, 2015, respectively. Securities having a fair value of approximately $650.9 million and $611.0 million at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) overnight borrowings. The Company did not hold any trading securities during the six months ended June 30, 2016 or the year ended December 31, 2015. The Bank is a member of the FHLB of New York. Members are required to own a particular amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. The Bank is a member of the Atlantic Central Banker’s Bank (“ACBB”) and is required to own ACBB stock. The Bank is also a member of the FRB system and required to own FRB stock. FHLB, ACBB and FRB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank owned approximately $20.9 million and $24.8 million in FHLB, ACBB and FRB stock at June 30, 2016 and December 31, 2015, respectively. These amounts were reported as restricted securities in the consolidated balance sheets.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -Glossary Debt Security -URI http://asc.fasb.org/extlink&oid=6509901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27290-111563 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27232-111563 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -Glossary Equity Security -URI http://asc.fasb.org/extlink&oid=6511694 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27161-111563 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27357-111563 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27405-111563 + Details
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