Note 3. Investment Securities Held-to-Maturity


	September 30, 2016								December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in thousands)
U.S. Government Sponsored Enterprises	$	165,176	$	2,577	$	16	$	167,737	$	186,734	$	2,234	$	141	$	188,827
SBA Backed Securities		20,926		69		—		20,995		—		—		—		—
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		1,379,089		22,755		1,393		1,400,451		1,252,169		7,547		9,583		1,250,133

Total	$	1,565,191	$	25,401	$	1,409	$	1,589,183	$	1,438,903	$	9,781	$	9,724	$	1,438,960

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,119,685,000 and $1,004,743,000 at September 30, 2016 and December 31, 2015, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $355,602,000 and $432,965,000 at September 30, 2016 and December 31, 2015, respectively. The Company realized gross gains of $12,000 from the proceeds of $192,000 from the sales of securities held-to-maturity for the nine months ended September 30, 2016. The sales of securities held-to-maturity relate to certain mortgage-backed securities for which the Company had previously collected a substantial portion of its principal investment. There were no sales of held-to-maturity securities for the nine months ended September 30, 2015.

At September 30, 2016 and December 31, 2015, all mortgage-backed securities are obligations of U.S. Government Agencies and Government Sponsored Enterprises. U.S. Government Sponsored Enterprises primarily refer to debt securities of Fannie Mae and Freddie Mac.

The following table shows the maturity distribution of the Company’s securities held-to-maturity at September 30, 2016.


	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	15,191	$	15,314
After one but within five years		1,360,309		1,379,055
After five but within ten years		186,544		191,613
More than ten years		3,147		3,201

Total	$	1,565,191	$	1,589,183

The weighted average remaining life of investment securities held-to-maturity at September 30, 2016 was 3.8 years. Included in the weighted average remaining life calculation at September 30, 2016 were $76,745,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The actual maturities, which were used in the table above, of mortgage-backed securities, will differ from the contractual maturities, due to the ability of the issuers to prepay underlying obligations.

As of September 30, 2016 and December 31, 2015, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not likely that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade.

The unrealized loss on U.S. Government Sponsored Enterprises and U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company does not intend to sell any of these securities and it is not likely that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired September 30, 2016 and December 31, 2015.

In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary.

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at September 30, 2016. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months or longer. There are 33 and 15 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 357 holdings at September 30, 2016.

September 30, 2016

Less Than 12 Months

12 Months or Longer

Total

Temporarily Impaired Investments

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

(in thousands)

U.S. Government Sponsored Enterprises

41,984

—

41,984

U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities

162,780

645

57,854

748

220,634

1,393

Total temporarily impaired securities

204,764

661

57,854

748

262,618

1,409

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at December 31, 2015. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for less than 12 months and a continuous loss position for 12 months or longer. There are 101 and 26 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 322 holdings at December 31, 2015.


	December 31, 2015
	Less Than 12 Months				12 Months or Longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
U.S. Government Sponsored Enterprises	$	9,859	$	141	$	—	$	—	$	9,859	$	141
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		626,218		6,657		123,864		2,926		750,082		9,583

Total temporarily impaired securities	$	636,077	$	6,798	$	123,864	$	2,926	$	759,941	$	9,724