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):
December 31, 2017
U.S. Treasury	$	—	$	—	$	—		$	—
U.S. government-sponsored entities	347,767		52		(3,877		)	343,942
Residential mortgage-backed securities:
Agency mortgage-backed securities	1,615,168		1,225		(17,519		)	1,598,874
Agency collateralized mortgage obligations	813,034		—		(18,077		)	794,957
Non-agency collateralized mortgage obligations	1		—		—			1
Commercial mortgage-backed securities	—		—		—			—
States of the U.S. and political subdivisions	21,151		6		(64		)	21,093
Other debt securities	4,913		—		(243		)	4,670
Total debt securities	2,802,034		1,283		(39,780		)	2,763,537
Equity securities	587		438		—			1,025
Total securities available for sale	$	2,802,621	$	1,721	$	(39,780	)	$	2,764,562
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):
December 31, 2017
U.S. Treasury	$	500	$	134	$	—		$	634
U.S. government-sponsored entities	247,310		93		(4,388		)	243,015
Residential mortgage-backed securities:
Agency mortgage-backed securities	1,219,802		3,475		(9,058		)	1,214,219
Agency collateralized mortgage obligations	777,146		32		(20,095		)	757,083
Non-agency collateralized mortgage obligations	—		—		—			—
Commercial mortgage-backed securities	80,786		414		(575		)	80,625
States of the U.S. and political subdivisions	916,724		13,209		(7,130		)	922,803
Total securities held to maturity	$	3,242,268	$	17,357	$	(41,246	)	$	3,218,379
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 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 $57.1 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:



Year Ended December 31	2017			2016			2015
(in thousands)
Gross gains	$	6,866		$	713		$	831
Gross losses	(950		)	(1		)	(9		)
Net gains	$	5,916		$	712		$	822

As of December 31, 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	$	81,819	$	81,594	$	30,438	$	30,254
Due from one to five years	278,153		274,516		225,054		220,921
Due from five to ten years	10,892		10,795		81,650		82,672
Due after ten years	2,967		2,800		827,392		832,605
	373,831		369,705		1,164,534		1,166,452
Residential mortgage-backed securities:
Agency mortgage-backed securities	1,615,168		1,598,874		1,219,802		1,214,219
Agency collateralized mortgage obligations	813,034		794,957		777,146		757,083
Non-agency collateralized mortgage obligations	1		1		—		—
Commercial mortgage-backed securities	—		—		80,786		80,625
Equity securities	587		1,025		—		—
Total securities	$	2,802,621	$	2,764,562	$	3,242,268	$	3,218,379

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 residential mortgage-backed securities based on the payment patterns of the underlying collateral.

Following is information relating to securities pledged:



December 31	2017			2016
(dollars in thousands)
Securities pledged (carrying value):
To secure public deposits, trust deposits and for other purposes as required by law	$	3,491,634		$	2,779,335
As collateral for short-term borrowings	263,756			322,038
Securities pledged as a percent of total securities	62.5		%	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:
December 31, 2017
U.S. government-sponsored entities	7	$	106,809	$	(363	)	10	$	201,485	$	(3,514	)	17	$	308,294	$	(3,877	)
Residential mortgage-backed securities:
Agency mortgage-backed securities	43	976,738		(7,723		)	28	473,625		(9,796		)	71	1,450,363		(17,519		)
Agency collateralized mortgage obligations	14	409,005		(6,231		)	33	335,452		(11,846		)	47	744,457		(18,077		)
Non-agency collateralized mortgage obligations	—	—		—			—	—		—			—	—		—
Commercial mortgage-backed securities	—	—		—			—	—		—			—	—		—
States of the U.S. and political subdivisions	7	11,254		(55		)	1	879		(9		)	8	12,133		(64		)
Other debt securities	—	—		—			3	4,670		(243		)	3	4,670		(243		)
Equity securities	—	—		—			—	—		—			—	—		—
Total temporarily impaired securities AFS	71	$	1,503,806	$	(14,372	)	75	$	1,016,111	$	(25,408	)	146	$	2,519,917	$	(39,780	)
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:
December 31, 2017
U.S. government-sponsored entities	4	$	54,790	$	(239	)	10	$	185,851	$	(4,149	)	14	$	240,641	$	(4,388	)
Residential mortgage-backed securities:
Agency mortgage-backed securities	36	648,485		(4,855		)	11	183,989		(4,203		)	47	832,474		(9,058		)
Agency collateralized mortgage obligations	14	275,290		(1,701		)	35	473,257		(18,394		)	49	748,547		(20,095		)
Non-agency collateralized mortgage obligations	—	—		—			—	—		—			—	—		—
Commercial mortgage-backed securities	3	26,399		(123		)	2	19,443		(452		)	5	45,842		(575		)
States of the U.S. and political subdivisions	16	56,739		(933		)	37	121,536		(6,197		)	53	178,275		(7,130		)
Total temporarily impaired securities HTM	73	$	1,061,703	$	(7,851	)	95	$	984,076	$	(33,395	)	168	$	2,045,779	$	(41,246	)



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 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. The following table presents a summary of the cumulative credit-related OTTI charges recognized as components of earnings for securities for which a portion of an OTTI is recognized in other comprehensive income:



(in thousands)	Equities			Total
For the Year Ended December 31, 2016
Beginning balance	$	27		$	27
Loss where impairment was not previously recognized	—			—
Additional loss where impairment was previously recognized	—			—
Reduction due to credit impaired securities sold	(27		)	(27		)
Ending balance	$	—		$	—

We did not recognize any OTTI losses on securities for the years ended December 31, 2017, 2016 and 2015.

States of the U.S. and Political Subdivisions

Our municipal bond portfolio with a carrying amount of $937.8 million as of December 31, 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 65% 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 $3.0 million. In addition to the strong stand-alone ratings, 62% 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.