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SECURITIES
 9 Months Ended
Sep. 30, 2017
Investments, Debt and Equity Securities [Abstract]  
SECURITIES
SECURITIES
The amortized cost and fair value of securities are as follows:
 
(in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Securities Available for Sale (AFS):
 
 
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
U.S. Treasury
$
19,976

 
$
4

 
$
—

 
$
19,980

U.S. government-sponsored entities
357,706

 
371

 
(2,465
)
 
355,612

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,646,390

 
3,213

 
(7,828
)
 
1,641,775

Agency collateralized mortgage obligations
807,342

 
191

 
(10,203
)
 
797,330

Non-agency collateralized mortgage obligations
1

 
—

 
—

 
1

Commercial mortgage-backed securities
—

 
—

 
—

 
—

States of the U.S. and political subdivisions
29,986

 
28

 
(9
)
 
30,005

Other debt securities
9,903

 
11

 
(208
)
 
9,706

Total debt securities
2,871,304

 
3,818

 
(20,713
)
 
2,854,409

Equity securities
587

 
362

 
(8
)
 
941

Total securities available for sale
$
2,871,891

 
$
4,180

 
$
(20,721
)
 
$
2,855,350

December 31, 2016
 
 
 
 
 
 
 
U.S. Treasury
$
29,874

 
$
79

 
$
—

 
$
29,953

U.S. government-sponsored entities
367,604

 
864

 
(3,370
)
 
365,098

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,267,535

 
2,257

 
(16,994
)
 
1,252,798

Agency collateralized mortgage obligations
546,659

 
419

 
(11,104
)
 
535,974

Non-agency collateralized mortgage obligations
891

 
6

 
—

 
897

Commercial mortgage-backed securities
1,292

 
—

 
(1
)
 
1,291

States of the U.S. and political subdivisions
36,065

 
86

 
(302
)
 
35,849

Other debt securities
9,828

 
94

 
(435
)
 
9,487

Total debt securities
2,259,748

 
3,805

 
(32,206
)
 
2,231,347

Equity securities
273

 
367

 
—

 
640

Total securities available for sale
$
2,260,021

 
$
4,172

 
$
(32,206
)
 
$
2,231,987


(in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Securities Held to Maturity (HTM):
 
 
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
U.S. Treasury
$
500

 
$
142

 
$
—

 
$
642

U.S. government-sponsored entities
247,462

 
268

 
(3,413
)
 
244,317

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,133,911

 
6,811

 
(4,355
)
 
1,136,367

Agency collateralized mortgage obligations
713,642

 
557

 
(13,703
)
 
700,496

Commercial mortgage-backed securities
81,144

 
867

 
(357
)
 
81,654

States of the U.S. and political subdivisions
809,262

 
8,870

 
(10,907
)
 
807,225

Total securities held to maturity
$
2,985,921

 
$
17,515

 
$
(32,735
)
 
$
2,970,701

December 31, 2016
 
 
 
 
 
 
 
U.S. Treasury
$
500

 
$
137

 
$
—

 
$
637

U.S. government-sponsored entities
272,645

 
348

 
(4,475
)
 
268,518

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
852,215

 
5,654

 
(8,645
)
 
849,224

Agency collateralized mortgage obligations
743,148

 
447

 
(17,801
)
 
725,794

Non-agency collateralized mortgage obligations
1,689

 
3

 
(6
)
 
1,686

Commercial mortgage-backed securities
49,797

 
181

 
(226
)
 
49,752

States of the U.S. and political subdivisions
417,348

 
1,456

 
(19,638
)
 
399,166

Total securities held to maturity
$
2,337,342

 
$
8,226

 
$
(50,791
)
 
$
2,294,777



During the first nine months of 2017, we received proceeds of $786.8 million from sales of AFS securities and realized a net gain of $3.7 million (gross gains of $4.7 million and gross losses of $1.0 million). We also received proceeds of $57.0 million from sales of HTM securities with a net carrying value of $54.9 million and realized a net gain of $2.2 million (gross gains of $2.2 million and gross losses of $4,000). The HTM securities that were sold represented amortizing securities that had already returned more than 85% of their principal outstanding at the time we acquired the securities and could be sold without tainting the remaining HTM portfolio.

Gross gains and gross losses were realized on securities as follows:

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in thousands)
2017
 
2016
 
2017
 
2016
Gross gains
$
2,834

 
$
299

 
$
6,845

 
$
597

Gross losses
(57
)
 
—

 
(950
)
 
(1
)
Net gains
$
2,777

 
$
299

 
$
5,895

 
$
596










As of September 30, 2017, the amortized cost and fair value of securities, by contractual maturities, were as follows:

 
Available for Sale
 
Held to Maturity
(in thousands)
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Due in one year or less
$
70,291

 
$
70,310

 
$
15,610

 
$
15,584

Due from one to five years
326,956

 
324,861

 
240,285

 
237,150

Due from five to ten years
17,358

 
17,299

 
79,476

 
80,669

Due after ten years
2,966

 
2,833

 
721,853

 
718,781

 
417,571

 
415,303

 
1,057,224

 
1,052,184

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,646,390

 
1,641,775

 
1,133,911

 
1,136,367

Agency collateralized mortgage obligations
807,342

 
797,330

 
713,642

 
700,496

Non-agency collateralized mortgage obligations
1

 
1

 
—

 
—

Commercial mortgage-backed securities
—

 
—

 
81,144

 
81,654

Equity securities
587

 
941

 
—

 
—

Total securities
$
2,871,891

 
$
2,855,350

 
$
2,985,921

 
$
2,970,701


Maturities may differ from contractual terms because borrowers may have the right to call or prepay obligations with or without penalties. Periodic payments are received on mortgage-backed securities based on the payment patterns of the underlying collateral.
Following is information relating to securities pledged:

(dollars in thousands)
September 30,
2017
 
December 31,
2016
Securities pledged (carrying value):
 
 
 
To secure public deposits, trust deposits and for other purposes as required by law
$
3,642,235

 
$
2,779,335

As collateral for short-term borrowings
336,392

 
322,038

Securities pledged as a percent of total securities
68.1
%
 
67.9
%
























Following are summaries of the fair values and unrealized losses of temporarily impaired securities, segregated by length of impairment:

 
Less than 12 Months
 
12 Months or More
 
Total
(dollars in thousands)
#
 
Fair Value
 
Unrealized
Losses
 
#
 
Fair Value
 
Unrealized
Losses
 
#
 
Fair Value
 
Unrealized
Losses
Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored entities
10

 
$
193,778

 
$
(1,219
)
 
2

 
$
38,754

 
$
(1,246
)
 
12

 
$
232,532

 
$
(2,465
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
49

 
1,032,211

 
(7,828
)
 
—

 
—

 
—

 
49

 
1,032,211

 
(7,828
)
Agency collateralized mortgage obligations
21

 
411,642

 
(4,846
)
 
18

 
173,880

 
(5,357
)
 
39

 
585,522

 
(10,203
)
Non-agency collateralized mortgage obligations
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial mortgage-backed securities
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

States of the U.S. and political subdivisions
4

 
7,882

 
(6
)
 
1

 
886

 
(3
)
 
5

 
8,768

 
(9
)
Other debt securities
—

 
—

 
—

 
3

 
4,704

 
(208
)
 
3

 
4,704

 
(208
)
Equity securities
1

 
185

 
(8
)
 
—

 
—

 
—

 
1

 
185

 
(8
)
Total temporarily impaired securities AFS
85

 
$
1,645,698

 
$
(13,907
)
 
24

 
$
218,224

 
$
(6,814
)
 
109

 
$
1,863,922

 
$
(20,721
)
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored entities
11

 
$
211,636

 
$
(3,370
)
 
—

 
$
—

 
$
—

 
11

 
$
211,636

 
$
(3,370
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
55

 
1,056,731

 
(16,994
)
 
—

 
—

 
—

 
55

 
1,056,731

 
(16,994
)
Agency collateralized mortgage obligations
26

 
346,662

 
(7,261
)
 
9

 
89,040

 
(3,843
)
 
35

 
435,702

 
(11,104
)
Commercial mortgage-backed securities
1

 
1,291

 
(1
)
 
—

 
—

 
—

 
1

 
1,291

 
(1
)
States of the U.S. and political subdivisions
20

 
28,631

 
(302
)
 
—

 
—

 
—

 
20

 
28,631

 
(302
)
Other debt securities
—

 
—

 
—

 
3

 
4,470

 
(435
)
 
3

 
4,470

 
(435
)
Total temporarily impaired securities AFS
113

 
$
1,644,951

 
$
(27,928
)
 
12

 
$
93,510

 
$
(4,278
)
 
125

 
$
1,738,461

 
$
(32,206
)
 
Less than 12 Months
 
12 Months or More
 
Total
(dollars in thousands)
#
 
Fair Value
 
Unrealized
Losses
 
#
 
Fair Value
 
Unrealized
Losses
 
#
 
Fair Value
 
Unrealized
Losses
Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored entities
9

 
$
162,966

 
$
(2,035
)
 
2

 
$
38,621

 
$
(1,378
)
 
11

 
$
201,587

 
$
(3,413
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
29

 
518,680

 
(4,355
)
 
—

 
—

 
—

 
29

 
518,680

 
(4,355
)
Agency collateralized mortgage obligations
15

 
197,186

 
(2,462
)
 
23

 
332,491

 
(11,241
)
 
38

 
529,677

 
(13,703
)
Commercial mortgage-backed securities
3

 
14,730

 
(106
)
 
1

 
7,562

 
(251
)
 
4

 
22,292

 
(357
)
States of the U.S. and political subdivisions
53

 
189,773

 
(6,956
)
 
12

 
33,177

 
(3,951
)
 
65

 
222,950

 
(10,907
)
Total temporarily impaired securities HTM
109

 
$
1,083,335

 
$
(15,914
)
 
38

 
$
411,851

 
$
(16,821
)
 
147

 
$
1,495,186

 
$
(32,735
)
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored entities
10

 
$
185,525

 
$
(4,475
)
 
—

 
$
—

 
$
—

 
10

 
$
185,525

 
$
(4,475
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
36

 
551,404

 
(8,645
)
 
—

 
—

 
—

 
36

 
551,404

 
(8,645
)
Agency collateralized mortgage obligations
29

 
516,237

 
(13,710
)
 
12

 
112,690

 
(4,091
)
 
41

 
628,927

 
(17,801
)
Non-agency collateralized mortgage obligations
3

 
1,128

 
(6
)
 
—

 
—

 
—

 
3

 
1,128

 
(6
)
Commercial mortgage-backed securities
1

 
12,317

 
(10
)
 
1

 
8,267

 
(216
)
 
2

 
20,584

 
(226
)
States of the U.S. and political subdivisions
94

 
247,301

 
(19,638
)
 
—

 
—

 
—

 
94

 
247,301

 
(19,638
)
Total temporarily impaired securities HTM
173

 
$
1,513,912

 
$
(46,484
)
 
13

 
$
120,957

 
$
(4,307
)
 
186

 
$
1,634,869

 
$
(50,791
)

We do not intend to sell the debt securities and it is not more likely than not that we will be required to sell the securities before recovery of their amortized cost basis.
Other-Than-Temporary Impairment
We evaluate our investment securities portfolio for other-than-temporary impairment (OTTI) on a quarterly basis. Impairment is assessed at the individual security level. We consider an investment security impaired if the fair value of the security is less than its cost or amortized cost basis. We did not recognize any OTTI losses on securities for the nine months ended September 30, 2017 or 2016.
States of the U.S. and Political Subdivisions
Our municipal bond portfolio with a carrying amount of $839.3 million as of September 30, 2017 is highly rated with an average entity-specific rating of AA and 99% of the portfolio rated A or better. All of the securities in the municipal portfolio are general obligation bonds. Geographically, municipal bonds support our primary footprint as 64.1% of the securities are from municipalities located throughout Pennsylvania, Ohio, Maryland, North Carolina and South Carolina. The average holding size of the securities in the municipal bond portfolio is $2.8 million. In addition to the strong stand-alone ratings, 62.0% of the municipalities have some formal credit enhancement insurance that strengthens the creditworthiness of their issue. Management reviews the credit profile of each issuer on a quarterly basis.