Investment Securities

The following table presents the amortized cost and estimated fair values of investment securities, which were all classified as available for sale:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
June 30, 2016
U.S. Government sponsored agency securities	$	143	$	3	$	—		$	146
State and municipal securities	333,246		12,101		—			345,347
Corporate debt securities	95,419		3,001		(6,873		)	91,547
Collateralized mortgage obligations	701,853		5,951		(1,458		)	706,346
Mortgage-backed securities	1,242,267		25,501		(5		)	1,267,763
Auction rate securities	106,949		—		(9,063		)	97,886
Total debt securities	2,479,877		46,557		(17,399		)	2,509,035
Equity securities	14,210		6,493		(14		)	20,689
Total	$	2,494,087	$	53,050	$	(17,413	)	$	2,529,724



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
December 31, 2015
U.S. Government sponsored agency securities	$	25,154	$	35	$	(53	)	$	25,136
State and municipal securities	256,746		6,019		—			262,765
Corporate debt securities	100,336		2,695		(6,076		)	96,955
Collateralized mortgage obligations	835,439		3,042		(16,972		)	821,509
Mortgage-backed securities	1,154,935		10,104		(6,204		)	1,158,835
Auction rate securities	106,772		—		(8,713		)	98,059
Total debt securities	2,479,382		21,895		(38,018		)	2,463,259
Equity securities	14,677		6,845		(8		)	21,514
Total	$	2,494,059	$	28,740	$	(38,026	)	$	2,484,773

Securities carried at $1.7 billion as of June 30, 2016 and December 31, 2015 were pledged as collateral to secure public and trust deposits and customer repurchase agreements.

Equity securities include common stocks of financial institutions (estimated fair value of $19.8 million at June 30, 2016 and $20.6 million at December 31, 2015) and other equity investments (estimated fair value of $895,000 at June 30, 2016 and $914,000 at December 31, 2015).

As of June 30, 2016, the financial institutions stock portfolio had a cost basis of $13.4 million and an estimated fair value of $19.8 million, including an investment in a single financial institution with a cost basis of $7.4 million and an estimated fair value of $10.4 million. The estimated fair value of this investment accounted for 52.5% of the estimated fair value of the Corporation's investments in the common stocks of publicly traded financial institutions. No other investment in a single financial institution in the financial institutions stock portfolio exceeded 10% of the portfolio's estimated fair value.

The amortized cost and estimated fair values of debt securities as of June 30, 2016, by contractual maturity, are shown in the following table. 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.



		Amortized Cost		Estimated Fair Value
	(in thousands)
Due in one year or less		$	55,965	$	56,628
Due from one year to five years		44,833		46,408
Due from five years to ten years		94,787		97,933
Due after ten years		340,172		333,957
		535,757		534,926
Collateralized mortgage obligations		701,853		706,346
Mortgage-backed securities		1,242,267		1,267,763
Total debt securities		$	2,479,877	$	2,509,035

The following table presents information related to the gross realized gains and losses on the sales of equity and debt securities:



	Gross Realized Gains		Gross Realized Losses			Net Gains (Losses)
Three months ended June 30, 2016	(in thousands)
Equity securities	$	4	$	(10	)	$	(6	)
Debt securities	108		(26		)	82
Total	$	112	$	(36	)	$	76
Three months ended June 30, 2015
Equity securities	$	2,290	$	—		$	2,290
Debt securities	125		—			125
Total	$	2,415	$	—		$	2,415

Six months ended June 30, 2016
Equity securities	$	737	$	(10	)	$	727
Debt securities	322		(26		)	296
Total	$	1,059	$	(36	)	$	1,023
Six months ended June 30, 2015
Equity securities	$	4,260	$	—		$	4,260
Debt securities	2,300		—			2,300
Total	$	6,560	$	—		$	6,560

The following table presents a summary of the cumulative credit related other-than-temporary impairment charges, recognized as components of earnings, for debt securities held by the Corporation at June 30, 2016 and 2015:



	Three months ended June 30						Six months ended June 30
	2016			2015			2016			2015
	(in thousands)
Balance of cumulative credit losses on debt securities, beginning of period	$	(11,510	)	$	(12,302	)	$	(11,510	)	$	(16,242	)
Reductions for securities sold during the period	—			792			—			4,730
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—			—			2
Balance of cumulative credit losses on debt securities, end of period	$	(11,510	)	$	(11,510	)	$	(11,510	)	$	(11,510	)

The following table presents the gross unrealized losses and estimated fair values of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 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
	(in thousands)
Corporate debt securities	$	—	$	—		$	32,186	$	(6,873	)	$	32,186	$	(6,873	)
Collateralized mortgage obligations	21,695		(17		)	292,954		(1,441		)	314,649		(1,458		)
Mortgage-backed securities	—		—			11,569		(5		)	11,569		(5		)
Auction rate securities	—		—			97,886		(9,063		)	97,886		(9,063		)
Total debt securities	21,695		(17		)	434,595		(17,382		)	456,290		(17,399		)
Equity securities	681		(14		)	—		—			681		(14		)
	$	22,376	$	(31	)	$	434,595	$	(17,382	)	$	456,971	$	(17,413	)

The Corporation’s collateralized mortgage obligations and mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the decline in market value of these securities is attributable to changes in interest rates and not credit quality, and because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation does not consider these investments to be other-than-temporarily impaired as of June 30, 2016.

As of June 30, 2016, all of the auction rate securities (auction rate certificates, or "ARCs"), were rated above investment grade. All of the loans underlying the ARCs have principal payments which are guaranteed by the federal government. As of June 30, 2016, all ARCs were current and making scheduled interest payments. Based on management’s evaluations, ARCs with an estimated fair value of $97.9 million were not subject to any other-than-temporary impairment charges as of June 30, 2016. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

For its investments in equity securities, particularly its investments in stocks of financial institutions, management evaluates the near-term prospects of the issuers in relation to the severity and duration of the impairment. Based on that evaluation and the Corporation’s ability and intent to hold those investments for a reasonable period of time sufficient for a recovery of fair value, the Corporation does not consider those investments with unrealized holding losses as of June 30, 2016 to be other-than-temporarily impaired.

The majority of the Corporation's available for sale corporate debt securities are issued by financial institutions. The following table presents the amortized cost and estimated fair value of corporate debt securities:



	June 30, 2016				December 31, 2015
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
	(in thousands)
Single-issuer trust preferred securities	$	43,697	$	37,461	$	44,648	$	39,106
Subordinated debt	29,662		30,708		39,610		40,779
Senior debt	18,040		18,652		12,043		12,329
Pooled trust preferred securities	—		706		—		706
Corporate debt securities issued by financial institutions	91,399		87,527		96,301		92,920
Other corporate debt securities	4,020		4,020		4,035		4,035
Available for sale corporate debt securities	$	95,419	$	91,547	$	100,336	$	96,955

Single-issuer trust preferred securities had an unrealized loss of $6.2 million at June 30, 2016. Six of the 19 single-issuer trust preferred securities were rated below investment grade by at least one ratings agency, with an amortized cost of $11.5 million and an estimated fair value of $9.5 million at June 30, 2016. All of the single-issuer trust preferred securities rated below investment grade were rated "BB" or "Ba". Two single-issuer trust preferred securities with an amortized cost of $3.7 million and an estimated fair value of $2.4 million at June 30, 2016 were not rated by any ratings agency.

Based on management’s evaluations, corporate debt securities with a fair value of $91.5 million were not subject to any other-than-temporary impairment charges as of June 30, 2016. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.