Investment Securities

The following tables summarize the amortized costs and estimated fair value of the securities portfolio at June 30, 2016 and December 31, 2015.

June 30, 2016 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	127,090	$	1,098	$	1	$	128,187
Obligations of states and political subdivisions		129,594		3,314		25		132,883
Mortgage-backed securities – residential		279,691		7,788		88		287,391
Mortgage-backed securities – commercial		24,890		433		-		25,323
Corporate debt securities		6,815		13		963		5,865
Mutual funds and equity securities		804		8		14		798
Total securities – available for sale	$	568,884	$	12,654	$	1,091	$	580,447
Held To Maturity
Obligations of states and political subdivisions	$	3,585	$	246	$	-	$	3,831

December 31, 2015 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	107,135	$	309	$	538	$	106,906
Obligations of states and political subdivisions		147,875		2,604		213		150,266
Mortgage-backed securities – residential		294,140		5,210		1,489		297,861
Mortgage-backed securities – commercial		20,655		52		123		20,584
Corporate debt securities		6,629		11		800		5,840
Mutual funds and equity securities		814		-		69		745
Total securities – available for sale	$	577,248	$	8,186	$	3,232	$	582,202
Held To Maturity
Obligations of states and political subdivisions	$	3,611	$	198	$	-	$	3,809

Investment securities with a carrying value of $319 million and $315 million at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public and trust deposits, repurchase agreements, and for other purposes.

The amortized cost and estimated fair value of the debt securities portfolio at June 30, 2016, by contractual maturity, are detailed below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mutual funds and equity securities in the available for sale portfolio consist of investments attributed to the Company’s captive insurance subsidiary. These securities have no stated maturity and are not included in the maturity schedule that follows.

Mortgage-backed securities are stated separately due to the nature of payment and prepayment characteristics of these securities, as principal is not due at a single date.

	Available For Sale				Held To Maturity
	Amortized		Estimated		Amortized		Estimated
June 30, 2016 (In thousands)	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	9,601	$	9,638	$	-	$	-
Due after one year through five years		164,845		166,712		-		-
Due after five years through ten years		69,820		72,025		640		743
Due after ten years		19,233		18,560		2,945		3,088
Mortgage-backed securities		304,581		312,714		-		-
Total	$	568,080	$	579,649	$	3,585	$	3,831

Gross realized gains and losses on the sale of available for sale investment securities were as follows:

	Three Months Ended				Six Months Ended
	June 30 ,				June 30,
(In thousands)	2016		2015		2016		2015

Gross realized gains	$	190	$	50	$	352	$	180
Gross realized losses		59		5		138		15
Net realized gain	$	131	$	45	$	214	$	165

Investment securities with unrealized losses at June 30, 2016 and December 31, 2015 not recognized in income are presented in the tables below. The tables segregate investment securities that have been in a continuous unrealized loss position for less than twelve months from those that have been in a continuous unrealized loss position for twelve months or more. The tables also include the fair value of the related securities.

	Less than 12 Months				12 Months or More				Total
June 30, 2016 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	3,411	$	1	$	-	$	-	$	3,411	$	1
Obligations of states and political subdivisions		11,971		22		1,681		3		13,652		25
Mortgage-backed securities – residential		3,390		7		7,100		81		10,490		88
Corporate debt securities		-		-		4,940		963		4,940		963
Mutual funds and equity securities		126		4		193		10		319		14
Total	$	18,898	$	34	$	13,914	$	1,057	$	32,812	$	1,091

	Less than 12 Months				12 Months or More				Total
December 31, 2015 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	57,927	$	275	$	21,576	$	263	$	79,503	$	538
Obligations of states and political subdivisions		30,426		123		8,276		90		38,702		213
Mortgage-backed securities – residential		118,978		851		21,723		638		140,701		1,489
Mortgage-backed securities – commercial		10,882		123		-		-		10,882		123
Corporate debt securities		204		6		5,155		794		5,359		800
Mutual funds and equity securities		481		21		264		48		745		69
Total	$	218,898	$	1,399	$	56,994	$	1,833	$	275,892	$	3,232

Unrealized losses included in the tables above have not been recognized in income since they have been identified as temporary. The Company evaluates investment securities for other-than-temporary impairment (“OTTI”) at least quarterly, and more frequently when economic or market conditions warrant. Many factors are considered, including: (1) the length of time and the extent to which the fair value has been less than cost, (

the financial condition and near-term prospects of the issuer, (

whether the market decline was effected by macroeconomic conditions, and (

4) whether the Company has the intent to sell the security or more likely than not will be required to sell the security before its anticipated recovery. The assessment of whether an OTTI charge exists involves a high degree of subjectivity and judgment and is based on the information available to the Company at a point in time.

Corporate debt securities in the Company’s investment securities portfolio at June 30, 2016 include single-issuer trust preferred capital securities with an unrealized loss of $963 thousand and a carrying value of $4.9 million. At year-end 2015, these securities had an unrealized loss of $793 thousand. These securities were issued by a national and global financial services firm and purchased by the Company during 2007.

The securities are currently performing and continue to be rated as investment grade by major rating agencies. The issuer of the securities announced in the first quarter of 2016 an increase in their common equity repurchase plan. The Company does not intend to sell these securities nor does the Company believe it is likely that it will be required to sell these securities prior to their anticipated recovery. The Company believes these securities are not impaired due to reasons of credit quality or other factors, but rather the unrealized loss is primarily attributed to continuing uncertainties in international economies and market volatility. The Company believes that it will collect all amounts due according to the contractual terms of these securities and that the fair values of these securities will continue to recover as they approach their maturity dates.

The Company attributes the unrealized losses in other sectors of its investment securities portfolio to changes in market interest rates and volatility. Investment securities with unrealized losses at June 30, 2016 are performing according to their contractual terms, and the Company does not expect to incur a loss on these securities unless they are sold prior to maturity. The Company does not have the intent to sell these securities nor does it believe it is likely that it will be required to sell these securities prior to their anticipated recovery. The Company does not consider any of the securities to be impaired due to reasons of credit quality or other factors.