4.	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):
March 31, 2017
U.S. Treasury	$	29,908	$	37	$	—		$	29,945
U.S. government-sponsored entities		397,634		676		(3,104	)		395,206
Residential mortgage-backed securities:
Agency mortgage-backed securities		1,650,743		3,024		(10,753	)		1,643,014
Agency collateralized mortgage obligations		514,232		347		(10,616	)		503,963
Non-agency collateralized mortgage obligations		2		—		—			2
Commercial mortgage-backed securities		420		—		(1	)		419
States of the U.S. and political subdivisions		34,763		69		(154	)		34,678
Other debt securities		21,899		68		(373	)		21,594

Total debt securities		2,649,601		4,221		(25,001	)		2,628,821
Equity securities		9,479		612		(97	)		9,994

Total securities available for sale	$	2,659,080	$	4,833	$	(25,098	)	$	2,638,815


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


Securities Held to Maturity (HTM):
March 31, 2017
U.S. Treasury	$	500	$	139	$	—		$	639
U.S. government-sponsored entities		247,580		395		(4,255	)		243,720
Residential mortgage-backed securities:
Agency mortgage-backed securities		1,243,947		7,382		(6,795	)		1,244,534
Agency collateralized mortgage obligations		798,506		841		(17,003	)		782,344
Commercial mortgage-backed securities		81,750		508		(302	)		81,956
States of the U.S. and political subdivisions		549,869		2,686		(18,851	)		533,704

Total securities held to maturity	$	2,922,152	$	11,951	$	(47,206	)	$	2,886,897


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

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


	Three Months Ended
	March 31,
(in thousands)	2017			2016
Gross gains	$	3,400		$	71
Gross losses		(775	)		—

Net gains	$	2,625		$	71

As of March 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

119,899

120,041

390

396

Due from one to five years

330,197

327,741

253,707

249,830

Due from five to ten years

31,143

30,918

68,397

68,666

Due after ten years

2,965

2,723

475,455

459,171

484,204

481,423

797,949

778,063

Residential mortgage-backed securities:

Agency mortgage-backed securities

1,650,743

1,643,014

1,243,947

1,244,534

Agency collateralized mortgage obligations

514,232

503,963

798,506

782,344

Non-agency collateralized mortgage obligations

—

Commercial mortgage-backed securities

420

419

81,750

81,956

Equity securities

9,479

9,994

—

Total securities

2,659,080

2,638,815

2,922,152

2,886,897

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:


	March 31,			December 31,
(dollars in thousands)	2017			2016
Securities pledged (carrying value):
To secure public deposits, trust deposits and for other purposes as required by law	$	3,145,072		$	2,779,335
As collateral for short-term borrowings		323,658			322,038
Securities pledged as a percent of total securities		62.4	%		67.9	%

Following are summaries of the fair values and unrealized losses of 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
March 31, 2017
U.S. government-sponsored entities		13	$	246,881	$	(3,104	)		—	$	—	$	—			13	$	246,881	$	(3,104	)
Residential mortgage-backed securities:
Agency mortgage-backed securities		56		1,176,464		(10,753	)		—		—		—			56		1,176,464		(10,753	)
Agency collateralized mortgage obligations		29		364,095		(6,990	)		9		84,869		(3,626	)		38		448,964		(10,616	)
Commercial mortgage-backed securities		1		419		(1	)		—		—		—			1		419		(1	)
States of the U.S. and political subdivisions		11		17,762		(72	)		5		5,834		(82	)		16		23,596		(154	)
Other debt securities		—		—		—			3		4,534		(373	)		3		4,534		(373	)
Equity securities		5		703		(97	)		—		—		—			5		703		(97	)

Total temporarily impaired securities AFS		115	$	1,806,324	$	(21,017	)		17	$	95,237	$	(4,081	)		132	$	1,901,561	$	(25,098	)


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	)


Securities Held to Maturity
March 31, 2017
U.S. government-sponsored entities		11	$	200,745	$	(4,255	)		—	$	—	$	—			11	$	200,745	$	(4,255	)
Residential mortgage-backed securities:
Agency mortgage-backed securities		38		695,915		(6,795	)		—		—		—			38		695,915		(6,795	)
Agency collateralized mortgage obligations		29		498,743		(13,236	)		12		107,546		(3,767	)		41		606,289		(17,003	)
Commercial mortgage-backed securities		3		14,875		(67	)		1		7,684		(235	)		4		22,559		(302	)
States of the U.S. and political subdivisions		103		279,356		(18,851	)		—		—		—			103		279,356		(18,851	)

Total temporarily impaired securities HTM		184	$	1,689,634	$	(43,204	)		13	$	115,230	$	(4,002	)		197	$	1,804,864	$	(47,206	)


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 three months ended March 31, 2017 or 2016.

States of the U.S. and Political Subdivisions

Our municipal bond portfolio with a carrying amount of $584.5 million as of March 31, 2017 is highly rated with an average entity-specific rating of AA and 99.0% 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 69.7% 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 $2.3 million. In addition to the strong stand-alone ratings, 66.0% 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.