Securities

The amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at December 31, 2017 and 2016 are as follows (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
At December 31, 2017
Available-for-sale:
Investment securities:
U.S. agency obligations	$	82,378	$	—	$	(797	)	$	81,581
Other investments	8,947		—		(247		)	8,700
Total available-for-sale	$	91,325	$	—	$	(1,044	)	$	90,281
Held-to-maturity:
Investment securities:
U.S. agency obligations	$	14,968	$	—	$	(65	)	$	14,903
State and municipal obligations	149,958		219		(1,475		)	148,702
Corporate debt securities	76,024		312		(3,962		)	72,374
Total investment securities	240,950		531		(5,502		)	235,979
Mortgage-backed securities:
FHLMC	186,921		151		(2,937		)	184,135
FNMA	263,103		1,193		(3,000		)	261,296
GNMA	75,243		64		(928		)	74,379
SBA	5,843		28		—			5,871
Total mortgage-backed securities	531,110		1,436		(6,865		)	525,681
Total held-to-maturity	$	772,060	$	1,967	$	(12,367	)	$	761,660
Total securities	$	863,385	$	1,967	$	(13,411	)	$	851,941
At December 31, 2016
Available-for-sale:
Investment securities:
U.S. agency obligations	$	12,542	$	—	$	(318	)	$	12,224
Other investments	8,778		—		(227		)	8,551
Total available-for-sale	$	21,320	$	—	$	(545	)	$	20,775
Held-to-maturity:
Investment securities:
U.S. agency obligations	$	19,960	$	69	$	—		$	20,029
State and municipal obligations	39,155		10		(856		)	38,309
Corporate debt securities	77,057		85		(6,001		)	71,141
Total investment securities	136,172		164		(6,857		)	129,479
Mortgage-backed securities:
FHLMC	144,016		195		(2,457		)	141,754
FNMA	217,445		2,209		(2,524		)	217,130
GNMA	92,475		119		(364		)	92,230
SBA	8,947		28		—			8,975
Total mortgage-backed securities	462,883		2,551		(5,345		)	460,089
Total held-to-maturity	$	599,055	$	2,715	$	(12,202	)	$	589,568
Total securities	$	620,375	$	2,715	$	(12,747	)	$	610,343

During the third quarter 2013, the Bank transferred $536.0 million of previously designated available-for-sale securities to a held-to-maturity designation at estimated fair value. The securities transferred had an unrealized net loss of $13.3 million at the time of transfer which continues to be reflected in accumulated other comprehensive loss on the consolidated balance sheet, net of subsequent amortization, which is being recognized over the life of the securities. The carrying value of the held-to-maturity securities at December 31, 2017 and 2016 are as follows (in thousands):



	December 31,
	2017			2016
Amortized cost	$	772,060		$	599,055
Net loss on date of transfer from available-for-sale	(13,347		)	(13,347		)
Accretion of unrealized loss on securities reclassified to held-to-maturity	5,349			4,204
Carrying value	$	764,062		$	589,912

There were no realized gains or losses on the sale of securities for the year ended December 31, 2017. Realized gains on the sale of securities were $75,000 for the year ended December 31, 2016 and realized losses were $87,000. There were no realized gains or losses on the sale of securities for the year ended December 31, 2015.

The amortized cost and estimated fair value of investment securities at December 31, 2017 by contractual maturity, are shown below (in thousands). Actual maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2017, corporate debt securities with an amortized cost and estimated fair value of $59.9 million and $56.3 million, respectively, were callable prior to the maturity date.



December 31, 2017	Amortized Cost		Estimated Fair Value
Less than one year	$	45,944	$	45,867
Due after one year through five years	158,397		156,862
Due after five years through ten years	88,986		87,180
Due after ten years	30,001		27,651
	$	323,328	$	317,560

Other investments consist of mutual funds that do not have a contractual maturity date and are excluded from the table above. Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments.

The estimated fair value of securities pledged as required security for deposits and for other purposes required by law amounted to $466.4 million and $506.0 million, at December 31, 2017 and 2016, respectively. The estimated fair value of securities pledged as collateral for reverse repurchase agreements amounted to $58.0 million and $67.5 million at December 31, 2017 and 2016, respectively.

The estimated fair value and unrealized loss for securities available-for-sale and held-to-maturity at December 31, 2017 and December 31, 2016, segregated by the duration of the unrealized loss, are as follows (in thousands):



	As of December 31, 2017
	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Available-for-sale:
Investment securities:
U.S. agency obligations	$	69,375	$	(496	)	$	12,206	$	(301	)	$	81,581	$	(797	)
Other investments	—		—			8,700		(247		)	8,700		(247		)
Total available-for-sale	69,375		(496		)	20,906		(548		)	90,281		(1,044		)
Held-to-maturity:
Investment securities:
U.S. agency obligations	14,903		(65		)	—		—			14,903		(65		)
State and municipal obligations	104,883		(1,153		)	14,363		(322		)	119,246		(1,475		)
Corporate debt securities	4,035		(30		)	56,106		(3,932		)	60,141		(3,962		)
Total investment securities	123,821		(1,248		)	70,469		(4,254		)	194,290		(5,502		)
Mortgage-backed securities:
FHLMC	98,138		(781		)	68,238		(2,156		)	166,376		(2,937		)
FNMA	132,982		(1,058		)	65,060		(1,942		)	198,042		(3,000		)
GNMA	26,105		(223		)	45,281		(705		)	71,386		(928		)
Total mortgage-backed securities	257,225		(2,062		)	178,579		(4,803		)	435,804		(6,865		)
Total held-to-maturity	381,046		(3,310		)	249,048		(9,057		)	630,094		(12,367		)
Total securities	$	450,421	$	(3,806	)	$	269,954	$	(9,605	)	$	720,375	$	(13,411	)

	As of December 31, 2016
	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Available-for-sale:
Investment securities:
U.S. agency obligations	$	12,224	$	(318	)	$	—	$	—		$	12,224	$	(318	)
Other investments	8,551		(227		)	—		—			8,551		(227		)
Total available-for-sale	20,775		(545		)	—		—			20,775		(545		)
Held-to-maturity:
Investment securities:
State and municipal obligations	32,995		(856		)	—		—			32,995		(856		)
Corporate debt securities	12,450		(120		)	49,119		(5,881		)	61,569		(6,001		)
Total investment securities	45,445		(976		)	49,119		(5,881		)	94,564		(6,857		)
Mortgage-backed securities:
FHLMC	102,461		(1,665		)	26,898		(792		)	129,359		(2,457		)
FNMA	124,403		(2,185		)	8,925		(339		)	133,328		(2,524		)
GNMA	79,116		(364		)	—		—			79,116		(364		)
Total mortgage-backed securities	305,980		(4,214		)	35,823		(1,131		)	341,803		(5,345		)
Total held-to-maturity	351,425		(5,190		)	84,942		(7,012		)	436,367		(12,202		)
Total securities	$	372,200	$	(5,735	)	$	84,942	$	(7,012	)	$	457,142	$	(12,747	)

At December 31, 2017, the amortized cost, estimated fair value and credit rating of the individual corporate debt securities in an unrealized loss position for greater than one year are as follows (in thousands):



	As of December 31, 2017
Security Description	Amortized Cost		Estimated Fair Value		Credit Rating Moody’s/S&P
BankAmerica Capital	$	15,000	$	14,038	Baa3/BBB-
Chase Capital	10,000		9,350		Baa2/BBB-
Wells Fargo Capital	5,000		4,713		A1/BBB+
Huntington Capital	5,000		4,450		Baa2/BB
Keycorp Capital	5,000		4,675		Baa2/BB+
PNC Capital	5,000		4,675		Baa1/BBB-
State Street Capital	5,000		4,625		A3/BBB
SunTrust Capital	5,000		4,575		Not Rated/BB+
Southern Company	1,524		1,509		Baa2/BBB+
AT&T Inc.	1,514		1,498		Baa1/BBB+
MetLife Global Funding	1,000		999		Aa3/AA-
State Street Corporation	1,000		999		A1/A
	$	60,038	$	56,106

At December 31, 2017, the estimated fair value of each of the above corporate debt securities was below cost. The Company concluded that these corporate debt securities were only temporarily impaired at December 31, 2017. In concluding that the impairments were only temporary, the Company considered several factors in its analysis. The Company noted that each issuer made all the contractually due payments when required. There were no defaults on principal or interest payments and no interest payments were deferred. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the Company does not have the intent to sell these corporate debt securities and it is more likely than not that the Company will not be required to sell the securities. Historically, the Company has not utilized securities sales as a source of liquidity. The Company’s long range liquidity plans indicate adequate sources of liquidity outside the securities portfolio.

The mortgage-backed securities are issued and guaranteed by either the Federal Home Loan Mortgage Corporation (“FHLMC”), the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”), or the Small Business Administration (“SBA”) corporations which are chartered by the United States Government and whose debt obligations are typically rated AA+ by one of the internationally-recognized credit rating services. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated fair value of the mortgage-backed securities. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that these securities were only temporarily impaired at December 31, 2017.