3. INVESTMENT SECURITIES

A summary of available for sale and held to maturity investment securities are as follows:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in thousands)
At June 30, 2015:
Held to Maturity:
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	$	166,200	$	111	$	(3,081	)	$	163,230
Commercial - U.S. Government sponsored entities	96,578		—		(658		)	95,920
Total	$	262,778	$	111	$	(3,739	)	$	259,150

Available for Sale:
Debt securities:
States and political subdivisions	$	188,899	$	2,169	$	(2,811	)	$	188,257
Corporate securities	98,454		1,262		(154		)	99,562
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	776,223		7,559		(5,715		)	778,067
Residential - Non-government agencies	69,603		1,273		(519		)	70,357
Commercial - Non-government agencies	135,535		2,566		(950		)	137,151
Other	817		101		—			918
Total	$	1,269,531	$	14,930	$	(10,149	)	$	1,274,312

At December 31, 2014:
Held to Maturity:
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	$	140,741	$	196	$	(2,150	)	$	138,787
Commercial - U.S. Government sponsored entities	97,546		—		(736		)	96,810
Total	$	238,287	$	196	$	(2,886	)	$	235,597

Available for Sale:
Debt securities:
States and political subdivisions	$	191,280	$	2,054	$	(1,689	)	$	191,645
Corporate securities	99,237		1,492		(125		)	100,604
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	744,527		11,064		(4,033		)	751,558
Residential - Non-government agencies	45,275		1,510		(92		)	46,693
Commercial - Non-government agencies	135,630		2,946		(935		)	137,641
Other	757		120		—			877
Total	$	1,216,706	$	19,186	$	(6,874	)	$	1,229,018

The amortized cost and estimated fair value of investment securities at June 30, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2015
	Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
Held to Maturity
Mortage-backed securities:
Residential - U.S. Government sponsored entities	$	166,200	$	163,230
Commercial - U.S. Government sponsored entities	96,578		95,920
Total	$	262,778	$	259,150

Available for Sale
Due in one year or less	$	2,567	$	2,660
Due after one year through five years	76,206		77,321
Due after five years through ten years	96,501		96,678
Due after ten years	112,079		111,160
Mortage-backed securities:
Residential - U.S. Government sponsored entities	776,223		778,067
Residential - Non-government agencies	69,603		70,357
Commercial - Non-government agencies	135,535		137,151
Other	817		918
Total	$	1,269,531	$	1,274,312

During the three months ended June 30, 2015, we sold certain available for sale investment securities for gross proceeds of $117.5 million. Gross realized losses on the sales of the available for sale investment securities were $1.9 million during the three months ended June 30, 2015. We did not sell any available for sale securities during the first quarter of 2015. The specific identification method was used as the basis for determining the cost of all securities sold.

During the three months ended June 30, 2014, we sold certain available for sale investment securities for gross proceeds of $162.5 million. Gross realized gains and losses on the sales of the available for sale investment securities were $0.9 million and $0.7 million, respectively, during the three months ended June 30, 2014. We did not sell any available for sale securities during the first quarter of 2014. The specific identification method was used as the basis for determining the cost of all securities sold.

Investment securities of $959.0 million and $900.5 million at June 30, 2015 and December 31, 2014, respectively, were pledged to secure public funds on deposit and other long-term and short-term borrowings.

Provided below is a summary of the 216 and 195 investment securities which were in an unrealized loss position at June 30, 2015 and December 31, 2014, respectively.

	Less than 12 months					12 months or longer					Total
			Unrealized					Unrealized					Unrealized
Description of Securities	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(Dollars in thousands)
At June 30, 2015:
Debt securities:
States and political subdivisions	$	66,678	$	(1,558	)	$	22,780	$	(1,253	)	$	89,458	$	(2,811	)
Corporate securities	26,349		(154		)	—		—			26,349		(154		)
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	464,847		(6,464		)	87,126		(2,332		)	551,973		(8,796		)
Residential - Non-government agencies	30,478		(519		)	—		—			30,478		(519		)
Commercial - U.S. Government sponsored entities	95,920		(658		)	—		—			95,920		(658		)
Commercial - Non-government agencies	57,620		(794		)	4,653		(156		)	62,273		(950		)
Total temporarily impaired securities	$	741,892	$	(10,147	)	$	114,559	$	(3,741	)	$	856,451	$	(13,888	)

At December 31, 2014:
Debt securities:
States and political subdivisions	$	23,591	$	(145	)	$	68,622	$	(1,544	)	$	92,213	$	(1,689	)
Corporate securities	23,938		(125		)	—		—			23,938		(125		)
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	107,755		(487		)	318,571		(5,696		)	426,326		(6,183		)
Residential - Non-government agencies	15,895		(92		)	—		—			15,895		(92		)
Commercial - U.S. Government sponsored entities	11,455		(34		)	85,355		(702		)	96,810		(736		)
Commercial - Non-government agencies	4,962		(8		)	47,539		(927		)	52,501		(935		)
Total temporarily impaired securities	$	187,596	$	(891	)	$	520,087	$	(8,869	)	$	707,683	$	(9,760	)

Other-Than-Temporary Impairment (“OTTI”)

Unrealized losses for all investment securities are reviewed to determine whether the losses are deemed “other-than-temporary.” Investment securities are evaluated for OTTI on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in their value below amortized cost is other-than-temporary. In conducting this assessment, we evaluate a number of factors including, but not limited to:

· The length of time and the extent to which fair value has been less than the amortized cost basis;

· Adverse conditions specifically related to the security, an industry, or a geographic area;

· The historical and implied volatility of the fair value of the security;

· The payment structure of the debt security and the likelihood of the issuer being able to make payments;

· Failure of the issuer to make scheduled interest or principal payments;

· Any rating changes by a rating agency; and

· Recoveries or additional declines in fair value subsequent to the balance sheet date.

The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a general lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized for anticipated credit losses.

Because we have no intent to sell securities in an unrealized loss position and it is not more likely than not that we will be required to sell such securities before recovery of its amortized cost basis, we do not consider our investments to be other-than-temporarily impaired.