Securities

Available-for-Sale Securities

The following tables summarize available-for-sale securities held by the Company at December 31, 2016 and 2015:



	Available-for-Sale Securities
December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	527,057	$	2,873	$	2,303	$	527,627
Obligations of U.S. states and political subdivisions	89,910		286		1,140		89,056
Mortgage-backed securities – residential, issued by
U.S. Government agencies	159,417		1,081		2,272		158,226
U.S. Government sponsored entities	662,724		1,993		13,287		651,430
Non-U.S. Government agencies or sponsored entities	116		0		0		116
U.S. corporate debt securities	2,500		0		338		2,162
Total debt securities	1,441,724		6,233		19,340		1,428,617
Equity securities	1,000		0		79		921
Total available-for-sale securities	$	1,442,724	$	6,233	$	19,419	$	1,429,538



	Available-for-Sale Securities
December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	551,176	$	3,512	$	1,795	$	552,893
Obligations of U.S. states and political subdivisions	83,981		898		153		84,726
Mortgage-backed securities – residential, issued by
U.S. Government agencies	94,459		1,535		1,316		94,678
U.S. Government sponsored entities	656,947		3,599		10,449		650,097
Non-U.S. Government agencies or sponsored entities	192		2		0		194
U.S. corporate debt securities	2,500		0		338		2,162
Total debt securities	1,389,255		9,546		14,051		1,384,750
Equity securities	1,000		0		66		934
Total available-for-sale securities	$	1,390,255	$	9,546	$	14,117	$	1,385,684

Held-to-Maturity Securities

The following tables summarize held-to-maturity securities held by the Company at December 31, 2016 and 2015:



	Held-to-Maturity Securities
December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	132,098	$	804	$	283	$	132,619
Obligations of U.S. states and political subdivisions	10,021		195		3		10,213
Total held-to-maturity debt securities	$	142,119	$	999	$	286	$	142,832

Held-to-Maturity Securities



	Held-to-Maturity Securities
December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	132,482	$	649	$	444	$	132,687
Obligations of U.S. states and political subdivisions	13,589		414		4		13,999
Total held-to-maturity debt securities	$	146,071	$	1,063	$	448	$	146,686

The following table sets forth information with regard to sales transactions of securities available-for-sale:



	Year ended December 31,
(in thousands)	2016		2015			2014
Proceeds from sales	$	97,296	$	137,594		$	90,551
Gross realized gains	894		1,359			426
Gross realized losses	0		(282		)	(78		)
Net gains on sales of available-for-sale securities	$	894	$	1,077		$	348

There were no sales of held-to-maturity securities in 2016, 2015, and 2014.

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2016:



December 31, 2016
Available-for-Sale Securities	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	208,940	$	2,303	$	0	$	0	$	208,940	$	2,303
Obligations of U.S. states and political subdivisions	58,852		1,139		751		1		59,603		1,140
Mortgage-backed securities – residential, issued by
U.S. Government agencies	98,307		1,570		22,376		702		120,683		2,272
U.S. Government sponsored entities	463,009		8,933		123,915		4,354		586,924		13,287
U.S. corporate debt securities	0		0		2,162		338		2,162		338
Equity Securities	0		0		921		79		921		79
Total available-for-sale securities	$	829,108	$	13,945	$	150,125	$	5,474	$	979,233	$	19,419

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2016:



Held-to-Maturity Securities	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	40,802	$	283	$	0	$	0	$	40,802	$	283
Obligations of U.S. sponsored entities	2,567		3		0		0		2,567		3
Total held-to-maturity securities	$	43,369	$	286	$	0	$	0	$	43,369	$	286

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2015:



December 31, 2015
Available-for-Sale Securities	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	183,697	$	1,618	$	5,844	$	177	$	189,541	$	1,795
Obligations of U.S. states and political subdivisions	25,402		141		3,408		12		28,810		153
Mortgage-backed securities – residential, issued by
U.S. Government agencies	32,636		350		30,244		966		62,880		1,316
U.S. Government sponsored entities	364,420		4,102		176,325		6,347		540,745		10,449
U.S. corporate debt securities	0		0		2,163		338		2,163		338
Equity securities	0		0		934		66		934		66
Total available-for-sale securities	$	606,155	$	6,211	$	218,918	$	7,906	$	825,073	$	14,117

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2015:



Held-to-Maturity Securities	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	29,671	$	444	$	0	$	0	$	29,671	$	444
Obligations of U.S. sponsored entities	1,966		4		0		0		1,966		4
Total held-to-maturity securities	$	31,637	$	448	$	0	$	0	$	31,637	$	448

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, U.S. government agencies such as Government National Mortgage Association, and non-agencies. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

The Company does not intend to sell the investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. Accordingly, as of December 31, 2016, and December 31, 2015, management believes the unrealized losses detailed in the tables above are not other-than-temporary.

The Company did not recognize any net credit impairment charge to earnings on investment securities in 2016 or 2015.

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.



December 31, 2016
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	17,878	$	18,034
Due after one year through five years	376,777		378,631
Due after five years through ten years	210,985		208,999
Due after ten years	13,827		13,181
Total	619,467		618,845
Mortgage-backed securities	822,257		809,772
Total available-for-sale debt securities	$	1,441,724	$	1,428,617



December 31, 2015
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	53,936	$	54,735
Due after one year through five years	351,462		353,736
Due after five years through ten years	219,161		218,561
Due after ten years	13,098		12,749
Total	637,657		639,781
Mortgage-backed securities	751,598		744,969
Total available-for-sale debt securities	$	1,389,255	$	1,384,750



December 31, 2016
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	7,452	$	7,469
Due after one year through five years	27,480		27,866
Due after five years through ten years	107,187		107,497
Due after ten years	0		0
Total held-to-maturity debt securities	$	142,119	$	142,832



December 31, 2015
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	9,249	$	9,294
Due after one year through five years	14,069		14,341
Due after five years through ten years	122,585		122,853
Due after ten years	168		198
Total held-to-maturity debt securities	$	146,071	$	146,686

Trading Securities

The following summarizes trading securities, at estimated fair value, as of:



(in thousands)	December 31, 2016		December 31, 2015

Obligations of U.S. Government sponsored entities	$	0	$	6,601
Mortgage-backed securities – residential, issued by
U.S. Government sponsored entities	0		767
Total trading securities	$	0	$	7,368

During 2016, the Company sold the remaining $1.5 million of trading securities, after principal repayments and maturities received. The pre-tax mark-to-market losses on trading securities were $182,000, $295,000 and $269,000 for 2016, 2015 and 2014, respectively.

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. See “Note 9 - Federal Funds Purchased and Securities Sold Under Agreements to Repurchase” for further discussion. Securities carried of $1.2 billion at December 31, 2016 and 2015, respectively, were either pledged or sold under agreements to repurchase.

Except for U.S. government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of shareholders’ equity at December 31, 2016.

The Company has equity investments in small business investment companies (“SBIC”) established for the purpose of providing financing to small businesses in market areas served by the Company. As of December 31, 2016 and 2015, these investments totaled $1.7 million and $1.8 million, respectively, and were included in other assets on the Company’s Consolidated Statements of Condition. These investments are accounted for either under the the cost method or the equity method of accounting. As of December 31, 2016, the Company reviewed these investments and determined that there was no impairment.

The Company also holds non-marketable Federal Home Loan Bank New York (“FHLBNY”) stock, non-marketable Federal Home Loan Bank Pittsburgh (“FHLBPITT”) stock and non-marketable Atlantic Community Bankers Bank (“ACBB”) stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock, FHLBPITT stock and ACBB stock totaled $28.1 million, $14.9 million and $95,000 at December 31, 2016, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. As such, the Company has not recognized any impairment on its holdings of FHLBNY and FHLBPITT stock.