3. Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
September 30, 2018
Federal agency	$	84,974	$	-	$	1,712	$	83,262
State & municipal		36,841		13		387		36,467
Mortgage-backed:
Government-sponsored enterprises		479,852		207		16,171		463,888
U.S. government agency securities		29,422		204		1,106		28,520
Collateralized mortgage obligations:
Government-sponsored enterprises		461,148		222		19,860		441,510
U.S. government agency securities		49,208		115		1,896		47,427
Total AFS securities	$	1,141,445	$	761	$	41,132	$	1,101,074
December 31, 2017
Federal agency	$	109,862	$	-	$	963	$	108,899
State & municipal		42,171		62		277		41,956
Mortgage-backed:
Government-sponsored enterprises		530,392		1,406		3,345		528,453
U.S. government agency securities		26,363		334		223		26,474
Collateralized mortgage obligations:
Government-sponsored enterprises		496,033		254		10,114		486,173
U.S. government agency securities		50,721		165		1,065		49,821
Equity securities		10,623		3,672		146		14,149
Total AFS securities	$	1,266,165	$	5,893	$	16,133	$	1,255,925

The amortized cost, estimated fair value and unrealized gains (losses) of held to maturity (“HTM”) securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
September 30, 2018
Federal agency	$	9,995	$	-	$	46	$	9,949
Mortgage-backed:
Government-sponsored enterprises		87,743		-		4,075		83,668
U.S. government agency securities		15,241		36		69		15,208
Collateralized mortgage obligations:
Government-sponsored enterprises		268,044		31		7,080		260,995
U.S. government agency securities		29,401		4		67		29,338
State & municipal		249,525		90		3,041		246,574
Total HTM securities	$	659,949	$	161	$	14,378	$	645,732
December 31, 2017
Mortgage-backed:
Government-sponsored enterprises	$	96,357	$	85	$	810	$	95,632
U.S. government agency securities		418		57		-		475
Collateralized mortgage obligations:
Government-sponsored enterprises		186,327		224		2,577		183,974
State & municipal		200,971		1,439		620		201,790
Total HTM securities	$	484,073	$	1,805	$	4,007	$	481,871

AFS and HTM securities with amortized costs totaling $1.6 billion at September 30, 2018 and $1.5 billion at December 31, 2017 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at September 30, 2018 and December 31, 2017, AFS and HTM securities with an amortized cost of $196.4 million and $256.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following table sets forth information with regard to investment securities with unrealized losses segregated according to the length of time the securities had been in a continuous unrealized loss position:

	Less than 12 months							12 months or longer							Total
(In thousands)	Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions
As of September 30, 2018
AFS securities:
Federal agency	$	39,069	$	(916	)		4	$	44,193	$	(796	)		4	$	83,262	$	(1,712	)		8
State & municipal		12,347		(115	)		22		16,165		(272	)		25		28,512		(387	)		47
Mortgage-backed		297,802		(9,061	)		72		178,186		(8,215	)		48		475,988		(17,276	)		120
Collateralized mortgage obligations		83,566		(1,816	)		16		384,459		(19,941	)		70		468,025		(21,757	)		86
Total securities with unrealized losses	$	432,784	$	(11,908	)		114	$	623,003	$	(29,224	)		147	$	1,055,787	$	(41,132	)		261

HTM securities:
Federal agency	$	9,949	$	(46	)		2	$	-	$	-			-	$	9,949	$	(46	)		2
Mortgage-backed		55,712		(1,678	)		5		42,778		(2,466	)		4		98,490		(4,144	)		9
Collateralized mortgage obligations		153,768		(2,195	)		22		97,515		(4,952	)		16		251,283		(7,147	)		38
State & municipal		84,258		(1,276	)		134		27,384		(1,765	)		41		111,642		(3,041	)		175
Total securities with unrealized losses	$	303,687	$	(5,195	)		163	$	167,677	$	(9,183	)		61	$	471,364	$	(14,378	)		224

As of December 31, 2017
AFS securities:
Federal agency	$	64,653	$	(242	)		5	$	44,246	$	(721	)		4	$	108,899	$	(963	)		9
State & municipal		23,566		(200	)		39		5,994		(77	)		8		29,560		(277	)		47
Mortgage-backed		317,630		(2,381	)		55		58,316		(1,187	)		24		375,946		(3,568	)		79
Collateralized mortgage obligations		227,917		(2,658	)		35		275,303		(8,521	)		42		503,220		(11,179	)		77
Equity securities		-		-			-		2,959		(146	)		1		2,959		(146	)		1
Total securities with unrealized losses	$	633,766	$	(5,481	)		134	$	386,818	$	(10,652	)		79	$	1,020,584	$	(16,133	)		213

HTM securities:
Mortgage-backed	$	15,477	$	(140	)		2	$	33,703	$	(670	)		2	$	49,180	$	(810	)		4
Collateralized mortgage obligations		118,476		(1,064	)		17		37,614		(1,513	)		6		156,090		(2,577	)		23
State & municipal		22,387		(132	)		40		15,720		(488	)		24		38,107		(620	)		64
Total securities with unrealized losses	$	156,340	$	(1,336	)		59	$	87,037	$	(2,671	)		32	$	243,377	$	(4,007	)		91

Declines in the fair value of HTM securities below their amortized cost, less any current period credit loss, that are deemed to be other-than-temporary are reflected in earnings as realized losses or in other comprehensive income (“OCI”). This classification is dependent upon whether the Company intends to sell the security, or whether it is more likely than not, that the Company will be required to sell the security before recovery. The other-than-temporary impairment (“OTTI”) shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be separated into (i) the amount representing the credit loss and (ii) the amount related to all other factors. The amount of the total OTTI related to the credit loss shall be recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in OCI, net of applicable taxes.

In estimating OTTI losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer and (iii) the historical and implied volatility of the fair value of the security.

Management has the intent to hold the securities classified as HTM until they mature, at which time it is believed the Company will receive full value for the securities. The unrealized losses on HTM debt securities are due to increases in market interest rates over yields at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. The fair value is expected to recover as the bond approaches its maturity date or repricing date or if market yields for such investments declines.

Management also has the intent to hold and will not be required to sell, the debt securities classified as AFS for a period of time sufficient for a recovery of cost, which may be until maturity. The unrealized losses on AFS debt securities are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. For AFS debt securities, OTTI losses are recognized in earnings if the Company intends to sell the security. In other cases the Company considers the relevant factors noted above, as well as the Company’s intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery in market value and whether evidence exists to support a realizable value equal to or greater than the cost basis. Any impairment loss on an equity security is equal to the full difference between the cost basis and the fair value of the security.

As of September 30, 2018 and December 31, 2017, management believes the impairments detailed in the table above are temporary. There were no OTTI losses realized in the Company’s unaudited interim consolidated statements of income for the three and nine months ended September 30, 2018 or in the three months ended September 30, 2017. For the nine months ended September 30, 2017, a $1.3 million impairment loss on an equity investment was realized in the Company’s unaudited interim consolidated statements of income.

There were no sales of HTM securities in the three and nine months ended September 30, 2018. During the three and nine months ended September 30, 2017, the Company sold HTM securities with an amortized cost of $0.8 million and an unrealized loss of $2 thousand. Due to significant deterioration in the creditworthiness of the issuers of the HTM securities, the circumstances caused the Company to change its intent to hold the HTM securities sold to maturity, which did not affect the Company’s intent to hold the remainder of the HTM portfolio to maturity.

The following tables set forth information with regard to gains and losses on equity securities at September 30, 2018:

(In thousands)	Three months ended September 30, 2018			Nine months ended September 30, 2018
Net gains and losses recognized on equity securities	$	412		$	575
Less: Net gains and losses recognized during the period on equity securities sold during the period		511			555
Unrealized gains and losses recognized on equity securities still held	$	(99	)	$	20

As of September 30, 2018, the carrying value of equity securities without readily determinable fair values was $4.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of September 30, 2018. There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the three and nine months ended September 30, 2018.

The following tables set forth information with regard to contractual maturities of debt securities at September 30, 2018:

(In thousands)	Amortized Cost		Estimated Fair Value
AFS debt securities:
Within one year	$	46,641	$	46,521
From one to five years		86,348		84,188
From five to ten years		176,260		171,240
After ten years		832,196		799,125
Total AFS debt securities	$	1,141,445	$	1,101,074
HTM debt securities:
Within one year	$	89,011	$	89,011
From one to five years		53,217		53,177
From five to ten years		215,931		209,974
After ten years		301,790		293,570
Total HTM debt securities	$	659,949	$	645,732

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. Government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at September 30, 2018 and December 31, 2017.