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Securities
 9 Months Ended
Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities
 
The amortized cost, gross unrealized gains and losses and fair value of securities available for sale and held to maturity at September 30, 2018 and December 31, 2017(1) are summarized as follows:
 
 
September 30, 2018
(In thousands)
Amortized
Cost
 
Gross Unrealized
Gains
 
Gross Unrealized
Losses
 
Fair
Value
Debt securities available for sale
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. Government Entities
$
7,486

 
$
114

 
$
(57
)
 
$
7,543

Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
597,689

 
153

 
(24,660
)
 
573,182

Private mortgage-backed securities and collateralized mortgage obligations
75,485

 
925

 
(318
)
 
76,092

Collateralized loan obligations
223,419

 
137

 
(566
)
 
222,990

Obligations of state and political subdivisions
43,951

 
261

 
(813
)
 
43,399

Totals
$
948,030

 
$
1,590


$
(26,414
)

$
923,206

 
 
 
 
 
 
 
 
Debt securities held to maturity
 
 
 
 
 
 
 
Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
$
313,667

 
$
—

 
$
(13,557
)
 
$
300,110

Private mortgage-backed securities and collateralized mortgage obligations
21,720

 
181

 
(131
)
 
21,770

Collateralized loan obligations
32,000

 
58

 
(19
)
 
32,039

Totals
$
367,387


$
239


$
(13,707
)

$
353,919

 
 
December 31, 2017
(In thousands)
Amortized
Cost
 
Gross Unrealized
Gains
 
Gross Unrealized
Losses
 
Fair
Value
Debt securities available for sale
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. Government Entities
$
9,475

 
$
274

 
$
(5
)
 
$
9,744

Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
560,396

 
1,163

 
(8,034
)
 
553,525

Private mortgage-backed securities and collateralized mortgage obligations
75,152

 
1,154

 
(285
)
 
76,021

Collateralized loan obligations
263,579

 
798

 
(68
)
 
264,309

Obligations of state and political subdivisions
45,118

 
813

 
(70
)
 
45,861

Totals
$
953,720

 
$
4,202

 
$
(8,462
)
 
$
949,460

 
 
 
 
 
 
 
 
Debt securities held to maturity
 
 
 
 
 
 
 
Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
$
353,541

 
$
802

 
$
(4,159
)
 
$
350,184

Private mortgage-backed securities and collateralized mortgage obligations
22,799

 
714

 
(53
)
 
23,460

Collateralized loan obligations
40,523

 
303

 
—

 
40,826

Totals
$
416,863

 
$
1,819

 
$
(4,212
)
 
$
414,470

(1) December 31, 2017 balances in the tables above reflect certain reclassifications between categories.  

There were no sales of securities during the three and nine month periods ended September 30, 2018. Proceeds from sales of securities during the three month period ended September 30, 2017 were $3.7 million, with gross gains of $15,000 and gross losses of $62,000. Proceeds from sales of securities during the nine month period ended September 30, 2017 were $7.5 million with gross gains of $36,000 and gross losses of $62,000. Included in “Securities (losses)/gains, net” for the three and nine month periods ended September 30, 2018, is $0.1 million and $0.2 million,respectively, representing the decline in the value of an investment in shares of a mutual fund that invests primarily in CRA-qualified debt securities.

At September 30, 2018, debt securities with a fair value of $162.4 million were pledged as collateral for United States Treasury deposits, other public deposits and trust deposits. Debt securities with a fair value of $189.0 million were pledged as collateral for repurchase agreements.
 
The amortized cost and fair value of debt securities available for sale and held to maturity at September 30, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
 
 
Held to Maturity
 
Available for Sale
(In thousands)

Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Due in less than one year
$
—

 
$
—

 
$
13,832

 
$
13,781

Due after one year through five years
—

 
—

 
79,637

 
79,582

Due after five years through ten years
32,000

 
32,039

 
177,911

 
177,196

Due after ten years
—

 
—

 
3,476

 
3,373

 
32,000

 
32,039

 
274,856

 
273,932

Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
313,667

 
300,110

 
597,689

 
573,182

Private mortgage-backed securities and collateralized mortgage obligations
21,720

 
21,770

 
75,485

 
76,092

   Totals
$
367,387

 
$
353,919

 
$
948,030

 
$
923,206


 
The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flows analyses, using observable market data where available. The tables below indicate the fair value of debt securities with unrealized losses and the period of time for which these losses were outstanding at September 30, 2018 and December 31, 2017, respectively.
 
 
September 30, 2018
 
Less than 12 months
 
12 months or longer
 
Total
(In thousands)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Treasury securities and obligations of U.S. Government Entities
$
7,543

 
$
(57
)
 
$
—

 
$
—

 
$
7,543

 
$
(57
)
Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
456,356

 
(15,703
)
 
416,936

 
(22,514
)
 
873,292

 
(38,217
)
Private mortgage-backed securities and collateralized mortgage obligations
84,026

 
(251
)
 
13,836

 
(197
)
 
97,862

 
(448
)
Collateralized loan obligations
255,030

 
(585
)
 
—

 
—

 
255,030

 
(585
)
Obligations of state and political subdivisions
40,136

 
(672
)
 
3,262

 
(142
)
 
43,398

 
(814
)
   Totals
$
843,091

 
$
(17,268
)
 
$
434,034

 
$
(22,853
)
 
$
1,277,125

 
$
(40,121
)
 
December 31, 2017
 
Less than 12 months
 
12 months or longer
 
Total
(In thousands)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Treasury securities and obligations of U.S. Government Entities
$
1,107

 
$
(5
)
 
$
—

 
$
—

 
$
1,107

 
$
(5
)
Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities
304,723

 
(2,047
)
 
413,725

 
(10,146
)
 
718,448

 
(12,193
)
Private mortgage-backed securities and collateralized mortgage obligations
—

 
—

 
20,744

 
(338
)
 
20,744

 
(338
)
Collateralized loan obligations
14,933

 
(68
)
 
—

 
—

 
14,933

 
(68
)
Obligations of state and political subdivisions
5,414

 
(14
)
 
5,864

 
(56
)
 
11,278

 
(70
)
   Totals
$
326,177

 
$
(2,134
)
 
$
440,333

 
$
(10,540
)
 
$
766,510

 
$
(12,674
)

 
The two tables above include debt securities held to maturity that were transferred from available for sale into held to maturity during 2014. Those securities had unrealized losses of $3.1 million at the date of transfer, and at September 30, 2018, the unamortized balance was $0.8 million. The fair value of those securities in an unrealized loss position for less than twelve months at September 30, 2018 and December 31, 2017 was $53.6 million and $22.9 million, respectively, with unrealized losses of $1.5 million and $0.2 million, respectively. The fair value of those securities in an unrealized loss position for 12 months or more at September 30, 2018 and December 31, 2017 was $14.7 million and $15.3 million, respectively, with unrealized losses of $0.9 million and $0.4 million, respectively.
 
At September 30, 2018, the Company had $38.2 million of unrealized losses on mortgage-backed securities and collateralized mortgage obligations of government sponsored entities having a fair value of $873.3 million that were attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The contractual cash flows for these debt securities are guaranteed by U.S. government-sponsored entities. Based on our assessment of these mitigating factors, management believes that the unrealized losses on these holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.
 
At September 30, 2018, $0.4 million of the unrealized losses pertained to private label debt securities secured by seasoned collateral with a fair value of $97.9 million. Management attributes the loss to a combination of factors, including relative changes in interest rates since the time of purchase. The collateral underlying these mortgage investments are 30- and 15-year fixed and adjustable rate mortgage loans with low loan to values, improving subordination, and historically have had minimal foreclosures and losses. Based on its assessment of these factors, management believes that the unrealized losses on these holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.

At September 30, 2018, the Company had unrealized losses of $0.6 million on collateralized loan obligations with a fair value of $255.0 million. Management expects to recover the entire amortized cost basis of these securities.

At September 30, 2018, the Company had unrealized losses of $0.8 million on obligations of state and political subdivisions with a fair value of $43.4 million. Management expects to recover the entire amortized cost basis of these securities.
 
As of September 30, 2018, the Company does not intend to sell debt securities that are in an unrealized loss position and it is not more likely than not that the Company will be required to sell these securities before recovery of the amortized cost basis. Therefore, management does not consider any investment to be other-than-temporarily impaired at September 30, 2018.
 
Included in other assets is Federal Home Loan Bank and Federal Reserve Bank stock which has a par value as of September 30, 2018 and December 31, 2017 of $37.5 million and $32.5 million, respectively. At September 30, 2018, the Company had not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these investments. Also included in other assets is a $6.1 million investment in a mutual fund carried at fair value.
 
The Company holds 11,330 shares of Visa Class B stock which, following resolution of pending litigation, will be converted to Visa Class A shares. Under the current conversion ratio that became effective June 28, 2018, the Company expects to receive 1.6298 shares of Class A stock for each share of Class B stock, for a total of 18,465 shares of Visa Class A stock. Our ownership of these shares is related to prior ownership in Visa’s network while Visa operated as a cooperative. The shares are recorded on our financial records at zero basis.