Securities

The following tables present the amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of securities by major security type and class of security:



(Dollars in thousands)
September 30, 2015	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Securities Available for Sale:
Obligations of U.S. government-sponsored enterprises		$52,430		$220		($7	)		$52,643
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	197,790		8,498		—			206,288
Obligations of states and political subdivisions	36,775		982		—			37,757
Individual name issuer trust preferred debt securities	29,806		—		(4,123		)	25,683
Corporate bonds	1,418		8		(2		)	1,424
Total securities available for sale		$318,219		$9,708		($4,132	)		$323,795
Held to Maturity:
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises		$21,140		$680		$—			$21,820
Total securities held to maturity		$21,140		$680		$—			$21,820
Total securities		$339,359		$10,388		($4,132	)		$345,615



(Dollars in thousands)
December 31, 2014	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Securities Available for Sale:
Obligations of U.S. government-sponsored enterprises		$31,205		$21		($54	)		$31,172
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	235,343		10,023		—			245,366
Obligations of states and political subdivisions	47,647		1,529		—			49,176
Individual name issuer trust preferred debt securities	30,753		—		(4,979		)	25,774
Corporate bonds	6,120		57		(3		)	6,174
Total securities available for sale		$351,068		$11,630		($5,036	)		$357,662
Held to Maturity:
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises		$25,222		$786		$—			$26,008
Total securities held to maturity		$25,222		$786		$—			$26,008
Total securities		$376,290		$12,416		($5,036	)		$383,670

At September 30, 2015 and December 31, 2014, securities available for sale and held to maturity with a fair value of $326.2 million and $350.5 million, respectively, were pledged as collateral for Federal Home Loan Bank of Boston (“FHLBB”) borrowings and letters of credit, potential borrowings with the FRB, certain public deposits and for other purposes. See Note 10 for additional disclosure on FHLBB borrowings.

The schedule of maturities of debt securities available for sale and held to maturity is presented below. Mortgage-backed securities are included based on weighted average maturities, adjusted for anticipated prepayments. All other debt securities are included based on contractual maturities. Actual maturities may differ from amounts presented because certain issuers have the right to call or prepay obligations with or without call or prepayment penalties. Yields on tax exempt obligations are not computed on a tax equivalent basis.



(Dollars in thousands)
September 30, 2015	Within 1 Year			1-5 Years			5-10 Years			After 10 Years			Totals
Securities Available for Sale:
Obligations of U.S. government-sponsored enterprises:
Amortized cost		$—			$15,100			$37,330			$—			$52,430
Weighted average yield	—		%	1.42		%	2.40		%	—		%	2.12		%
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises:
Amortized cost	34,731			90,071			51,254			21,734			197,790
Weighted average yield	3.70			3.25			2.77			1.66			3.03
Obligations of state and political subdivisions:
Amortized cost	4,606			21,546			10,623			—			36,775
Weighted average yield	3.83			3.96			4.01			—			3.96
Individual name issuer trust preferred debt securities:
Amortized cost	—			—			—			29,806			29,806
Weighted average yield	—			—			—			1.17			1.17
Corporate bonds:
Amortized cost	—			709			709			—			1,418
Weighted average yield	—			2.03			2.95			—			2.63
Total debt securities available for sale:
Amortized cost		$39,337			$127,426			$99,916			$51,540			$318,219
Weighted average yield	3.72		%	3.15		%	2.76		%	1.37		%	2.81		%
Fair value		$40,952			$131,936			$102,557			$48,350			$323,795
Securities Held to Maturity:
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises:
Amortized cost		$2,690			$8,332			$6,562			$3,556			$21,140
Weighted average yield	3.11		%	3.03		%	2.71		%	0.78		%	2.56		%
Fair value		$2,777			$8,600			$6,773			$3,670			$21,820

Included in the above table are debt securities with an amortized cost balance of $114.2 million and a fair value of $111.1 million at September 30, 2015 that are callable at the discretion of the issuers. Final maturities of the callable securities range from 5 months to 21 years, with call features ranging from 1 month to 6 years.

Other-Than-Temporary Impairment Assessment

Washington Trust assesses whether the decline in fair value of investment securities is other-than-temporary on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates impairments in value both qualitatively and quantitatively to assess whether they are other‑than‑temporary.

The following tables summarize temporarily impaired securities, segregated by length of time the securities have been in a continuous unrealized loss position:



(Dollars in thousands)	Less than 12 Months						12 Months or Longer						Total
September 30, 2015	#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored enterprises	2		$10,148		($7	)	—		$—		$—		2		$10,148		($7	)
Individual name issuer trust preferred debt securities	—	—		—			10	25,683		(4,123		)	10	25,683		(4,123		)
Corporate bonds	1	200		(2		)	—	—		—			1	200		(2		)
Total temporarily impaired securities	3		$10,348		($9	)	10		$25,683		($4,123	)	13		$36,031		($4,132	)



(Dollars in thousands)	Less than 12 Months						12 Months or Longer						Total
December 31, 2014	#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored enterprises	3		$20,952		($54	)	—		$—		$—		3		$20,952		($54	)
Individual name issuer trust preferred debt securities	—	—		—			11	25,774		(4,979		)	11	25,774		(4,979		)
Corporate bonds	—	—		—			1	199		(3		)	1	199		(3		)
Total temporarily impaired securities	3		$20,952		($54	)	12		$25,973		($4,982	)	15		$46,925		($5,036	)

Further deterioration in credit quality of the underlying issuers of the securities, further deterioration in the condition of the financial services industry, a continuation or worsening of the current economic environment, or additional declines in real estate values, among other things, may further affect the fair value of these securities and increase the potential that certain unrealized losses be designated as other-than-temporary in future periods, and the Corporation may incur additional write-downs.

Unrealized losses on temporarily impaired securities as of September 30, 2015 and December 31, 2014 were concentrated in variable rate trust preferred debt securities.

Trust Preferred Debt Securities of Individual Name Issuers

Included in debt securities in an unrealized loss position at September 30, 2015 were 10 trust preferred security holdings issued by 7 individual companies in the banking sector. Management believes the unrealized loss position in these holdings was attributable to the general widening of spreads for this category of debt securities issued by financial services companies since the time these securities were purchased. Based on the information available through the filing date of this report, all individual name issuer trust preferred debt securities held in our portfolio continue to accrue and make payments as expected with no payment deferrals or defaults on the part of the issuers. As of September 30, 2015, individual name issuer trust preferred debt securities with an amortized cost of $10.9 million and unrealized losses of $1.1 million were rated below investment grade by Standard & Poors, Inc. (“S&P”). Management reviewed the collectibility of these securities taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date as well as credit rating changes between the reporting period date and the filing date of this report, and other information. We noted no additional downgrades to below investment grade between December 31, 2014 and the filing date of this report. Based on these analyses, management concluded that it expects to recover the entire amortized cost basis of these securities. Furthermore, Washington Trust does not intend to sell these securities and it is not more‑likely‑than‑not that Washington Trust will be required to sell these securities before recovery of their cost basis, which may be maturity. Therefore, management does not consider these investments to be other-than-temporarily impaired at September 30, 2015.