3. INVESTMENT SECURITIES

A summary of our investment portfolio is as follows:



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
March 31, 2018
Held-to-maturity:
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	$	96,619	$	29	$	(3,510	)	$	93,138
Commercial - U.S. Government-sponsored entities	80,459		—		(2,198		)	78,261
Total	$	177,078	$	29	$	(5,708	)	$	171,399

Available-for-sale:
Debt securities:
States and political subdivisions	$	177,766	$	1,385	$	(1,930	)	$	177,221
Corporate securities	68,433		51		(426		)	68,058
U.S. Treasury obligations and direct obligations of U.S Government agencies	37,148		84		(79		)	37,153
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	831,728		493		(20,899		)	811,322
Commercial - U.S. Government agencies and sponsored entities	54,628		—		(1,171		)	53,457
Residential - Non-government agencies	44,667		396		(623		)	44,440
Commercial - Non-government agencies	135,010		998		(1,567		)	134,441
Total	$	1,349,380	$	3,407	$	(26,695	)	$	1,326,092

Equity securities	$	619	$	134	$	—		$	753



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2017
Held-to-maturity:
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	$	100,279	$	106	$	(2,222	)	$	98,163
Commercial - U.S. Government-sponsored entities	91,474		—		(436		)	91,038
Total	$	191,753	$	106	$	(2,658	)	$	189,201

Available-for-sale:
Debt securities:
States and political subdivisions	$	178,459	$	2,041	$	(719	)	$	179,781
Corporate securities	73,772		582		(76		)	74,278
U.S. Treasury obligations and direct obligations of U.S Government agencies	25,519		60		(69		)	25,510
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	808,242		2,230		(9,789		)	800,683
Commercial - U.S. Government agencies and sponsored entities	40,012		—		(287		)	39,725
Residential - Non-government agencies	45,679		1,084		—			46,763
Commercial - Non-government agencies	135,058		2,461		(193		)	137,326
Total	$	1,306,741	$	8,458	$	(11,133	)	$	1,304,066

Equity securities	$	686	$	139	$	—		$	825

The amortized cost and estimated fair value of investment securities at March 31, 2018 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.



	March 31, 2018
(dollars in thousands)	Amortized Cost		Fair Value
Held-to-maturity:
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	$	96,619	$	93,138
Commercial - U.S. Government-sponsored entities	80,459		78,261
Total	$	177,078	$	171,399

Available-for-sale:
Due in one year or less	$	13,691	$	13,702
Due after one year through five years	156,766		156,598
Due after five years through ten years	49,619		49,279
Due after ten years	63,271		62,853

Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	831,728		811,322
Commercial - U.S. Government agencies and sponsored entities	54,628		53,457
Residential - Non-government agencies	44,667		44,440
Commercial - Non-government agencies	135,010		134,441
Total	$	1,349,380	$	1,326,092

Equity securities	$	619	$	753

We did not sell any available-for-sale securities during the three months ended March 31, 2018 and 2017.

Investment securities of $1.04 billion and $1.08 billion at March 31, 2018 and December 31, 2017, respectively, were pledged to secure public funds on deposit and other long-term debt and short-term borrowings.

Provided below is a summary of the 335 and 223 investment securities which were in an unrealized or unrecognized loss position at March 31, 2018 and December 31, 2017, respectively, aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position.



	Less Than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2018
Debt securities:
States and political subdivisions	$	81,236	$	(1,043	)	$	14,893	$	(887	)	$	96,129	$	(1,930	)
Corporate securities	44,658		(245		)	5,177		(181		)	49,835		(426		)
U.S. Treasury obligations and direct obligations of U.S Government agencies	10,852		(79		)	—		—			10,852		(79		)
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	550,723		(10,744		)	321,774		(13,665		)	872,497		(24,409		)
Residential - Non-government agencies	26,466		(623		)	—		—			26,466		(623		)
Commercial - U.S. Government agencies and sponsored entities	131,718		(3,369		)	—		—			131,718		(3,369		)
Commercial - Non-government agencies	83,975		(1,567		)	—		—			83,975		(1,567		)
Total temporarily impaired securities	$	929,628	$	(17,670	)	$	341,844	$	(14,733	)	$	1,271,472	$	(32,403	)



	Less Than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2017
Debt securities:
States and political subdivisions	$	53,811	$	(305	)	$	15,403	$	(414	)	$	69,214	$	(719	)
Corporate securities	—		—			5,307		(76		)	5,307		(76		)
U.S. Treasury obligations and direct obligations of U.S Government agencies	10,740		(69		)	—		—			10,740		(69		)
Mortgage-backed securities:
Residential - U.S. Government-sponsored entities	335,883		(3,372		)	340,219		(8,639		)	676,102		(12,011		)
Residential - Non-government agencies	—		—			—		—			—		—
Commercial - U.S. Government-sponsored entities	130,763		(723		)	—		—			130,763		(723		)
Commercial - Non-government agencies	28,490		(193		)	—		—			28,490		(193		)
Total temporarily impaired securities	$	559,687	$	(4,662	)	$	360,929	$	(9,129	)	$	920,616	$	(13,791	)

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.