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Securities
 12 Months Ended
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities
(In Thousands, Except Number of Securities)
The amortized cost and fair value of securities held to maturity were as follows as of the dates presented:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2014
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
125,081

 
$
10

 
$
(2,915
)
 
$
122,176

Obligations of states and political subdivisions
305,082

 
15,428

 
(198
)
 
320,312

 
$
430,163

 
$
15,438

 
$
(3,113
)
 
$
442,488

December 31, 2013
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
125,061

 
$
14

 
$
(8,727
)
 
$
116,348

Obligations of states and political subdivisions
287,014

 
7,897

 
(2,683
)
 
292,228

 
$
412,075

 
$
7,911

 
$
(11,410
)
 
$
408,576



In light of the ongoing fiscal uncertainty in state and local governments, the Company analyzes its exposure to potential losses in its security portfolio on at least a quarterly basis. Management reviews the underlying credit rating and analyzes the financial condition of the respective issuers. Based on this analysis, the Company sold certain securities representing obligations of state and political subdivisions that were classified as held to maturity during 2013. The securities sold showed significant credit deterioration in that an analysis of the financial condition of the respective issuers showed the issuers were operating at net deficits with little to no financial cushion to offset future contingencies. The securities sold in 2013 had carrying values of $4,292, and the Company recognized a net gain of $169 on the sales during the year ended December 31, 2013. No securities classified as held to maturity were sold during the years ended December 31, 2014 or December 31, 2012.
The amortized cost and fair value of securities available for sale were as follows as of the dates presented:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2014
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
6,119

 
$
147

 
$
(119
)
 
$
6,147

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
292,283

 
4,908

 
(832
)
 
296,359

Government agency collateralized mortgage obligations
158,436

 
1,523

 
(2,523
)
 
157,436

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
45,714

 
1,608

 
(137
)
 
47,185

Government agency collateralized mortgage obligations
4,970

 
202

 
—

 
5,172

Trust preferred securities
26,400

 
137

 
(6,781
)
 
19,756

Other debt securities
17,517

 
487

 
(74
)
 
17,930

Other equity securities
2,331

 
1,268

 
—

 
3,599

 
$
553,770

 
$
10,280

 
$
(10,466
)
 
$
553,584


 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2013
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
$
6,144

 
$
125

 
$
(201
)
 
$
6,068

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
261,659

 
2,747

 
(4,414
)
 
259,992

Government agency collateralized mortgage obligations
149,682

 
1,542

 
(4,679
)
 
146,545

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
41,252

 
1,373

 
(584
)
 
42,041

Government agency collateralized mortgage obligations
5,007

 
59

 
—

 
5,066

Trust preferred securities
27,531

 
73

 
(9,933
)
 
17,671

Other debt securities
19,544

 
240

 
(230
)
 
19,554

Other equity securities
2,775

 
1,542

 
—

 
4,317

 
$
513,594

 
$
7,701

 
$
(20,041
)
 
$
501,254



Gross realized gains and gross realized losses on sales of securities available for sale for the years 2014, 2013 and 2012 were as follows:
 
 
Year Ended December 31,
 
2014
 
2013
 
2012
Gross gains on sales of securities available for sale
$
375

 
$
—

 
$
2,321

Gross losses on sales of securities available for sale
—

 
(115
)
 
(427
)
Gain/(loss) on sales of securities available for sale, net
$
375

 
$
(115
)
 
$
1,894



At December 31, 2014 and 2013, securities with a carrying value of approximately $617,189 and $604,571, respectively, were pledged to secure government, public, trust, and other deposits. Securities with a carrying value of $16,410 and $7,626 were pledged as collateral for short-term borrowings and derivative instruments at December 31, 2014 and 2013, respectively.
The amortized cost and fair value of securities at December 31, 2014 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.
 
 
Held to Maturity
 
Available for Sale
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Due within one year
$
10,307

 
$
10,394

 
$
—

 
$
—

Due after one year through five years
64,819

 
66,424

 
1,063

 
1,126

Due after five years through ten years
219,684

 
221,924

 
5,056

 
5,021

Due after ten years
135,353

 
143,746

 
26,400

 
19,756

Residential mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
—

 
—

 
292,283

 
296,359

Government agency collateralized mortgage obligations
—

 
—

 
158,436

 
157,436

Commercial mortgage backed securities:
 
 
 
 
 
 
 
Government agency mortgage backed securities
—

 
—

 
45,714

 
47,185

Government agency collateralized mortgage obligations
—

 
—

 
4,970

 
5,172

Other debt securities
—

 
—

 
17,517

 
17,930

Other equity securities
—

 
—

 
2,331

 
3,599

 
$
430,163

 
$
442,488

 
$
553,770

 
$
553,584



The following table presents the gross unrealized losses and fair value of investment securities, aggregated by investment category and the length of time the investments have been in a continuous unrealized loss position as of the dates presented:
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
#
 
Fair
Value
 
Unrealized
Losses
 
#
 
Fair
Value
 
Unrealized
Losses
 
#
 
Fair
Value
 
Unrealized
Losses
Held to Maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
2
 
$
1,000

 
$
(1
)
 
26
 
$
119,174

 
$
(2,914
)
 
28
 
$
120,174

 
$
(2,915
)
Obligations of states and political subdivisions
3
 
3,353

 
(29
)
 
16
 
10,052

 
(169
)
 
19
 
13,405

 
(198
)
Total
5
 
$
4,353

 
$
(30
)
 
42
 
$
129,226

 
$
(3,083
)
 
47
 
$
133,579

 
$
(3,113
)
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
26
 
$
105,747

 
$
(7,826
)
 
2
 
$
9,090

 
$
(901
)
 
28
 
$
114,837

 
$
(8,727
)
Obligations of states and political subdivisions
111
 
59,503

 
(2,578
)
 
2
 
933

 
(105
)
 
113
 
60,436

 
(2,683
)
Total
137
 
$
165,250

 
$
(10,404
)
 
4
 
$
10,023

 
$
(1,006
)
 
141
 
$
175,273

 
$
(11,410
)
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
#
 
Fair
Value
 
Unrealized
Losses
 
#
 
Fair
Value
 
Unrealized
Losses
 
#
 
Fair
Value
 
Unrealized
Losses
Available for Sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
0
 
$
—

 
$
—

 
1
 
$
3,881

 
$
(119
)
 
1
 
$
3,881

 
$
(119
)
Residential mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
3
 
18,924

 
(39
)
 
13
 
49,612

 
(793
)
 
16
 
68,536

 
(832
)
Government agency collateralized mortgage obligations
6
 
32,169

 
(138
)
 
18
 
65,552

 
(2,385
)
 
24
 
97,721

 
(2,523
)
Commercial mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
0
 
—

 
—

 
3
 
10,651

 
(137
)
 
3
 
10,651

 
(137
)
Government agency collateralized mortgage obligations
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Trust preferred securities
0
 
—

 
—

 
3
 
18,503

 
(6,781
)
 
3
 
18,503

 
(6,781
)
Other debt securities
0
 
—

 
—

 
2
 
4,175

 
(74
)
 
2
 
4,175

 
(74
)
Other equity securities
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Total
9
 
$
51,093

 
$
(177
)
 
40
 
$
152,374

 
$
(10,289
)
 
49
 
$
203,467

 
$
(10,466
)
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of other U.S. Government agencies and corporations
1
 
$
3,799

 
$
(201
)
 
0
 
$
—

 
$
—

 
1
 
$
3,799

 
$
(201
)
Residential mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
32
 
134,858

 
(3,451
)
 
3
 
13,239

 
(963
)
 
35
 
148,097

 
(4,414
)
Government agency collateralized mortgage obligations
17
 
68,496

 
(3,468
)
 
4
 
16,750

 
(1,211
)
 
21
 
85,246

 
(4,679
)
Commercial mortgage backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government agency mortgage backed securities
4
 
16,570

 
(584
)
 
0
 
—

 
—

 
4
 
16,570

 
(584
)
Government agency collateralized mortgage obligations
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Trust preferred securities
0
 
—

 
—

 
3
 
16,456

 
(9,933
)
 
3
 
16,456

 
(9,933
)
Other debt securities
3
 
7,100

 
(217
)
 
1
 
1,897

 
(13
)
 
4
 
8,997

 
(230
)
Other equity securities
0
 
—

 
—

 
0
 
—

 
—

 
0
 
—

 
—

Total
57
 
$
230,823

 
$
(7,921
)
 
11
 
$
48,342

 
$
(12,120
)
 
68
 
$
279,165

 
$
(20,041
)

The Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period greater than twelve months, the Company has experienced an overall improvement in the fair value of its investment portfolio on account of the decrease in interest rates from the prior year and is collecting principal and interest payments from the respective issuers as scheduled. As such, the Company did not record any other-than-temporary impairment for the years ended December 31, 2014 or 2013.
The Company holds investments in pooled trust preferred securities that had a cost basis of $26,400 and $27,531 and a fair value of $19,756 and $17,671 at December 31, 2014 and 2013, respectively. The investments in pooled trust preferred securities consist of four securities representing interests in various tranches of trusts collateralized by debt issued by over 320 financial institutions. Management’s determination of the fair value of each of its holdings in pooled trust preferred securities is based on the current credit ratings, the known deferrals and defaults by the underlying issuing financial institutions and the degree to which future deferrals and defaults would be required to occur before the cash flow for the Company’s tranches is negatively impacted. In addition, management continually monitors key credit quality and capital ratios of the issuing institutions. This determination is further supported by quarterly valuations, which are performed by third parties, of each security obtained by the Company. The Company does not intend to sell the investments, and it is not more likely than not that the Company will be required to sell the investments before recovery of the investments’ amortized cost, which may be at maturity. At December 31, 2014, management did not, and does not currently, believe such securities will be settled at a price less than the amortized cost of the investment, but the Company previously concluded that it was probable that there had been an adverse change in estimated cash flows for all four trust preferred securities and recognized credit related impairment losses on these securities in 2010 and 2011. For the years ended December 31, 2014, 2013, and 2012, the Company determined the pooled trust preferred securities and their estimated cash flow were fairly valued, and no additional impairment was recognized during these periods.
The Company's analysis of the pooled trust preferred securities in 2014 supported a return to accrual status for two of the four securities (XIII and XXIII.) An observed history of principal and interest payments combined with improved qualitative and quantitative factors described above justified the accrual of interest on these securities. However, one of the remaining securities (XXIV) is still in "payment in kind" status where interest payments are not expected until a future date, and, although the Company has received principal payments from the fourth security (XXVI), the Company's analysis of the qualitative and quantitative factors described above does not justify a return to accrual status at this time. As a result, pooled trust preferred securities XXIV and XXVI remain classified as nonaccruing assets at December 31, 2014, and investment interest is recorded on the cash-basis method until qualifying for return to accrual status.
The following table provides information regarding the Company’s investments in pooled trust preferred securities at December 31, 2014:
Name
 
Single/
Pooled
 
Class/
Tranche
 
Amortized
Cost
 
Fair
Value
 
Unrealized
Gain (Loss)
 
Lowest
Credit
Rating
 
Issuers
Currently
in Deferral
or Default
XIII
 
Pooled
 
B-2
 
$
1,116

 
$
1,253

 
$
137

 
 Caa3
 
23%
XXIII
 
Pooled
 
B-2
 
8,670

 
6,156

 
(2,514
)
 
Baa3
 
19%
XXIV
 
Pooled
 
B-2
 
12,076

 
8,877

 
(3,199
)
 
 Ca
 
33%
XXVI
 
Pooled
 
B-2
 
4,538

 
3,470

 
(1,068
)
 
B3
 
25%
 
 
 
 
 
 
$
26,400

 
$
19,756

 
$
(6,644
)
 
 
 
 


The following table provides a summary of the cumulative credit related losses recognized in earnings for which a portion of OTTI has been recognized in other comprehensive income:
 
2014
 
2013
Balance at January 1
$
(3,337
)
 
$
(3,337
)
Additions related to credit losses for which OTTI was not previously recognized
—

 
—

Increases in credit loss for which OTTI was previously recognized
—

 
—

Balance at December 31
$
(3,337
)
 
$
(3,337
)