Note

- Investment Securities

Available-for-Sale

Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:

			Gross		Gross		Estimated
December 31, 2016	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. agency securities	$	107,425	$	519	$	1,802	$	106,142
Residential mortgage backed securities		329,606		324		3,691		326,239
Municipal bonds		94,607		1,723		400		95,930
Corporate bonds		9,508		82		11		9,579
Other equity investments		218		-		-		218
	$	541,364	$	2,648	$	5,904	$	538,108

			Gross		Gross		Estimated
December 31, 2015	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. agency securities	$	56,775	$	477	$	277	$	56,975
Residential mortgage backed securities		299,709		692		3,160		297,241
Municipal bonds		114,253		4,131		3		118,381
Corporate bonds		15,090		-		152		14,938
Other equity investments		307		27		-		334
	$	486,134	$	5,327	$	3,592	$	487,869

In addition, at

December

31,

2016

and

December

31,

2015,

the Company held

$21.6

million and

$16.9

million in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and which are not marketable, and therefore are carried at cost.

The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise

99.9%

of total investment securities, is relatively short at

3.8

years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of

December

31,

2016

represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which

may

be maturity.

Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of

December

31,

2016

and

2015

are as follows:

			Less than				12 Months
			12 Months				or Greater				Total
			Estimated				Estimated				Estimated
December 31, 2016	Number of		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Securities		Value		Losses		Value		Losses		Value		Losses
U. S. agency securities		27	$	88,991	$	1,764	$	3,768	$	38	$	92,759	$	1,802
Residential mortgage backed securities		112		232,347		3,110		19,402		581		251,749		3,691
Municipal bonds		16		34,743		400		-		-		34,743		400
Corporate bonds		2		4,998		11		-		-		4,998		11
		157	$	361,079	$	5,285	$	23,170	$	619	$	384,249	$	5,904

			Less than				12 Months
			12 Months				or Greater				Total
			Estimated				Estimated				Estimated
December 31, 2015	Number of		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Securities		Value		Losses		Value		Losses		Value		Losses
U. S. agency securities		13	$	32,927	$	277	$	-	$	-	$	32,927	$	277
Residential mortgage backed securities		92		157,871		1,438		58,954		1,722		216,825		3,160
Municipal bonds		2		1,559		3		-		-		1,559		3
Corporate bonds		4		14,938		152		-		-		14,938		152
		111	$	207,295	$	1,870	$	58,954	$	1,722	$	266,249	$	3,592

The amortized cost and estimated fair value of investments available-for-sale at

December

31,

2016

and

2015

by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities will differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2016				December 31, 2015
	Amortized		Estimated		Amortized		Estimated
(dollars in thousands)	Cost		Fair Value		Cost		Fair Value
U. S. agency securities maturing:
One year or less	$	83,885	$	82,548	$	31,436	$	31,361
After one year through five years		20,736		20,897		18,826		19,047
Five years through ten years		2,804		2,697		6,513		6,567
Residential mortgage backed securities		329,606		326,239		299,709		297,241
Municipal bonds maturing:
One year or less		1,056		1,070		4,450		4,478
After one year through five years		45,808		46,865		41,213		43,720
Five years through ten years		46,668		46,839		66,001		67,398
After ten years		1,075		1,156		2,589		2,785
Corporate bonds
After one year through five years		8,008		8,079		15,090		14,938
After ten years		1,500		1,500		-		-
Other equity investments		218		218		307		334
	$	541,364	$	538,108	$	486,134	$	487,869

2016,

gross realized gains on sales of investment securities were

$1.4

million and gross realized losses on sales of investment securities were

$188

thousand. In

2015,

gross realized gains on sales of investment securities were

$2.7

million and gross realized losses on sales of investment securities were

$475

thousand. In

2014,

gross realized gains on sales of investment securities were

$298

thousand and gross realized losses on sales of investment securities were

$276

thousand.

Proceeds from sales and calls of investment securities for

2016,

2015

and

2014

were

$94.3

million,

$111.7

million, and

$49.9

million, respectively.

The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at

December

31,

2016

was

$497.3

million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of

December

31,

2016

and

December

31,

2015,

there were no holdings of securities of any

one

issuer, other than the U.S. Government and U.S. agency securities, which exceeded

ten

percent of shareholders’ equity.