INVESTMENTS

3 Months Ended

Mar. 31, 2017

Note 2 – Investments

Investments available-for-sale

The amortized cost and estimated fair values of investments available-for-sale at the dates indicated are presented in the following table:

			March 31, 2017								December 31, 2016
					Gross		Gross		Estimated				Gross		Gross		Estimated
			Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
(In thousands)			Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. government agencies			$	124,316	$	-	$	(2,547)	$	121,769	$	124,314	$	32	$	(2,556)	$	121,790
State and municipal				326,743		8,207		(462)		334,488		281,090		7,180		(586)		287,684
Mortgage-backed				347,574		2,801		(4,113)		346,262		314,029		2,851		(4,169)		312,711
Corporate debt				9,100		304		-		9,404		9,100		34		-		9,134
Trust preferred				931		19		-		950		1,089		-		(77)		1,012
	Total debt securities			808,664		11,331		(7,122)		812,873		729,622		10,097		(7,388)		732,331
Marketable equity securities				1,223		-		-		1,223		1,223		-		-		1,223
		Total investments available-for-sale	$	809,887	$	11,331	$	(7,122)	$	814,096	$	730,845	$	10,097	$	(7,388)	$	733,554

Any unrealized losses in the U.S. government agencies, state and municipal, mortgage-backed or corporate debt investment securities at March 31, 2017 are not the result of credit related events but due to changes in interest rates. These declines in fair market value are considered temporary in nature and are expected to recover over time as these securities approach maturity.

The mortgage-backed securities portfolio at March 31, 2017 is composed entirely of either the most senior tranches of GNMA, FNMA or FHLMC collateralized mortgage obligations ($119.9 million), or GNMA, FNMA or FHLMC mortgage-backed securities ($226.4 million). The Company does not intend to sell these securities and has sufficient liquidity to hold these securities for an adequate period of time to allow for any anticipated recovery in fair value.

At March 31, 2017 the trust preferred portfolio consisted of one pooled trust preferred security. The pooled trust preferred security, which is backed by debt issued by banks and thrifts, totaled $0.9 million with a fair value of the same amount. The fair value of this security was determined by management through the use of a third party valuation specialist due to the limited trading activity for this security.

As a result of this evaluation, it was determined that the pooled trust preferred security had not incurred any credit-related other-than-temporary impairment (“OTTI”) for the quarter ended March 31, 2017. The security had an insignificant unrealized gain at March 31, 2017 recognized in other comprehensive income (“OCI”). The security is not expected to be sold and the Company has the ability to hold it until maturity.

The following table provides the activity of OTTI on investment securities due to credit losses recognized in earnings for the period indicated:

(In thousands)		OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2016	$	531

Additions for credit losses not previously recognized		-

Cumulative credit losses on investment securities through March 31, 2017	$	531

Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in an unrealized loss position at the dates indicated are presented in the following table:

		March 31, 2017
						Continuous Unrealized
						Losses Existing for:
		Number								Total
		of				Less than		More than		Unrealized
(Dollars in thousands)		Securities		Fair Value		12 months		12 months		Losses
U.S. government agencies			14	$	111,769	$	2,547	$	-	$	2,547
State and municipal			57		57,432		388		74		462
Mortgage-backed			38		222,855		3,903		210		4,113
	Total		109	$	392,056	$	6,838	$	284	$	7,122

		December 31, 2016
						Continuous Unrealized
						Losses Existing for:
		Number								Total
		of				Less than		More than		Unrealized
(Dollars in thousands)		Securities		Fair Value		12 months		12 months		Losses
U.S. government agencies			12	$	96,788	$	2,556	$	-	$	2,556
State and municipal			53		48,010		516		70		586
Mortgage-backed			37		212,844		3,971		198		4,169
Trust preferred			1		1,012		-		77		77
	Total		103	$	358,654	$	7,043	$	345	$	7,388

The amortized cost and estimated fair values of debt securities available-for-sale by contractual maturity at the dates indicated are provided in the following table. The Company has allocated mortgage-backed securities into the four maturity groupings reflected in the following table using the expected average life of the individual securities based on statistics provided by independent third party industry sources. Expected maturities will differ from contractual maturities as borrowers may have the right to prepay obligations with or without prepayment penalties.

		March 31, 2017				December 31, 2016
				Estimated				Estimated
		Amortized		Fair		Amortized		Fair
(In thousands)		Cost		Value		Cost		Value
Due in one year or less		$	5,310	$	5,348	$	7,493	$	7,541
Due after one year through five years			162,299		168,435		156,953		162,233
Due after five years through ten years			289,294		289,884		282,468		282,713
Due after ten years			351,761		349,206		282,708		279,844
	Total debt securities available for sale	$	808,664	$	812,873	$	729,622	$	732,331

At March 31, 2017 and December 31, 2016, investments available-for-sale with a book value of $468.2 million and $453.0 million, respectively, were pledged as collateral for certain government deposits and for other purposes as required or permitted by law. The outstanding balance of no single issuer, except for U.S. Agencies securities, exceeded ten percent of stockholders' equity at March 31, 2017 and December 31, 2016.

Equity securities

Other equity securities at the dates indicated are presented in the following table:

(In thousands)		March 31, 2017		December 31, 2016
Federal Reserve Bank stock		$	8,352	$	8,334
Federal Home Loan Bank of Atlanta stock			33,259		37,760
	Total equity securities	$	41,611	$	46,094