Note 3—Investment Securities

The amortized cost and estimated fair values of investments in debt and equity securities are summarized in the following tables:


	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Securities Available for Sale
Obligations of U.S. government corporations and agencies	$	434,357	$	1,949	$	(6,628	)	$	429,678
Obligations of states and political subdivisions		121,746		267		(4,396	)		117,617
Marketable equity securities		3,000		—		(62	)		2,938

Total securities available for sale	$	559,103	$	2,216	$	(11,086	)	$	550,233

Securities Held to Maturity
Obligations of U.S. government corporations and agencies	$	587,982	$	5,001	$	(4,199	)	$	588,784
Obligations of states and political subdivisions		14,554		56		(191	)		14,419

Total securities held to maturity	$	602,536	$	5,057	$	(4,390	)	$	603,203


	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Securities Available for Sale
Obligations of U.S. government corporations and agencies	$	312,917	$	2,761	$	(1,996	)	$	313,682
Obligations of states and political subdivisions		86,823		1,428		(33	)		88,218
Marketable equity securities		3,000		—		(15	)		2,985

Total securities available for sale	$	402,740	$	4,189	$	(2,044	)	$	404,885

Securities Held to Maturity
Obligations of U.S. government corporations and agencies	$	711,994	$	8,394	$	(2,882	)	$	717,506
Obligations of states and political subdivisions		14,536		277		(110	)		14,703

Total securities held to maturity	$	726,530	$	8,671	$	(2,992	)	$	732,209

No investment securities were sold during 2016. Investment securities totaling $2,000 were sold in 2015 resulting in no gain or loss on sale. Investment securities sold during 2014 totaled $14,130,000. Investment securities with an aggregate carrying value of $292,737,000 and $297,547,000 at December 31, 2016 and 2015, respectively, were pledged as collateral for specific borrowings, lines of credit and local agency deposits.

The amortized cost and estimated fair value of debt securities at December 31, 2016 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2016, obligations of U.S. government corporations and agencies with a cost basis totaling $1,022,339,000 consist almost entirely of residential real estate mortgage-backed securities whose contractual maturity, or principal repayment, will follow the repayment of the underlying mortgages. For purposes of the following table, the entire outstanding balance of these mortgage-backed securities issued by U.S. government corporations and agencies is categorized based on final maturity date. At December 31, 2016, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S. government corporations and agencies to be approximately 6.1 years. Average remaining life is defined as the time span after which the principal balance has been reduced by half.


Investment Securities (In thousands)	Available for Sale				Held to Maturity
Investment Securities (In thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year	$	1	$	1		—		—
Due after one year through five years		9,392		9,650	$	1,177	$	1,185
Due after five years through ten years		14,548		15,132		4,776		4,762
Due after ten years		535,162		525,450		596,583		597,256

Totals	$	559,103	$	550,233	$	602,536	$	603,203

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:


	Less than 12 months					12 months or more					Total
December 31, 2016	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Securities Available for Sale:
Obligations of U.S. government corporations and agencies	$	370,389	$	(6,628	)		—		—		$	370,389	$	(6,628	)
Obligations of states and political subdivisions		90,825		(4,396	)		—		—			90,825		(4,396	)
Marketable equity securities		2,938		(62	)		—		—			2,938		(62	)

Total securities available-for-sale	$	464,152	$	(11,086	)		—		—		$	464,152	$	(11,086	)

Securities Held to Maturity:
Obligations of U.S. government corporations and agencies	$	280,497	$	(4,199	)		—		—		$	280,497	$	(4,199	)
Obligations of states and political subdivisions		9,984		(191	)		—		—			9,984		(191	)

Total securities held-to-maturity	$	290,481	$	(4,390	)		—		—		$	290,481	$	(4,390	)


	Less than 12 months					12 months or more					Total
December 31, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Securities Available for Sale:
Obligations of U.S. government corporations and agencies	$	193,306	$	(1,996	)		—		—		$	193,306	$	(1,996	)
Obligations of states and political subdivisions		6,469		(33	)		—		—			6,469		(33	)
Marketable equity securities		2,985		(15	)		—		—			2,985		(15	)

Total securities available-for-sale	$	202,760	$	(2,044	)		—		—		$	202,760	$	(2,044	)

Securities Held to Maturity:
Obligations of U.S. government corporations and agencies	$	198,481	$	(2,882	)		—		—		$	198,481	$	(2,882	)
Obligations of states and political subdivisions		497		(11	)	$	1,121	$	(99	)		1,618		(110	)

Total securities held-to-maturity	$	198,978	$	(2,893	)	$	1,121	$	(99	)	$	200,099	$	(2,992	)

Obligations of U.S. government corporations and agencies: Unrealized losses on investments in obligations of U.S. government corporations and agencies are caused by interest rate increases. The contractual cash flows of these securities are guaranteed by U.S. Government Sponsored Entities (principally Fannie Mae and Freddie Mac). It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At December 31, 2016, 62 debt securities representing obligations of U.S. government corporations and agencies had unrealized losses with aggregate depreciation of 1.64% from the Company’s amortized cost basis.

Obligations of states and political subdivisions: The unrealized losses on investments in obligations of states and political subdivisions were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At December 31, 2016, 107 debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of 4.35% from the Company’s amortized cost basis.

Marketable equity securities: At December 31, 2016, marketable equity securities had unrealized losses representing aggregate depreciation of 2.07% from the Company’s amortized cost basis.