4.	INVESTMENT SECURITIES

The following tables detail the amortized cost and the estimated fair value of our available-for-sale investment securities. None of our investment securities is classified as trading or held-to-maturity.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In Thousands)
Available-for-sale securities:
June 30, 2014:

State and political subdivisions	$	111,256	$	2,484	$	(1,159	)	$	112,581
U.S. Government and government sponsored enterprises (“GSE”)		36,986		55		(20	)		37,021
Collateralized Mortgage Obligation (“CMO”)		163,781		482		(2,185	)		162,078
Federal National Mortgage Association (“FNMA”) Mortgage-Backed Securities (“MBS”)		321,960		735		(3,371	)		319,324
Federal Home Loan Mortgage Corporation MBS (“FHLMC”)		127,454		244		(1,406	)		126,292
Government National Mortgage Association MBS (“GNMA”)		84,436		499		(525	)		84,410

	$	845,873	$	4,499	$	(8,666	)	$	841,706


December 31, 2013
State and political subdivisions	$	105,354	$	257	$	(5,426	)	$	100,185
GSE		32,082		93		(17	)		32,158
CMO		103,064		28		(5,535	)		97,557
FNMA MBS		382,909		20		(15,801	)		367,128
FHLMC MBS		129,460		29		(4,994	)		124,495
GNMA MBS		97,830		743		(2,981	)		95,592

	$	850,699	$	1,170	$	(34,754	)	$	817,115

The scheduled maturities of investment securities available-for-sale at June 30, 2014 and December 31, 2013 were as follows:


	Available-for-Sale
	Amortized Cost		Fair Value
	(In Thousands)
June 30, 2014
Within one year	$	23,178	$	23,224
After one year but within five years		38,821		39,376
After five years but within ten years		235,509		233,595
After ten years		548,365		545,511

	$	845,873	$	841,706

December 31, 2013
Within one year	$	16,319	$	16,378
After one year but within five years		19,761		19,986
After five years but within ten years		229,033		217,911
After ten years		585,586		562,840

	$	850,699	$	817,115

MBS have expected maturities that differ from their contractual maturities. These differences arise because borrowers may have the right to call or prepay obligations with or without a prepayment penalty.

At June 30, 2014, investment securities with market values aggregating $504.7 million were pledged as collateral for retail customer repurchase agreements, municipal deposits, and other obligations. From time to time, investment securities are also pledged as collateral for FHLB borrowings. There were $11.0 million of FHLB pledged investment securities at June 30, 2014.

During the first six months of 2014, we sold $140.9 million of investment securities during the period categorized as available-for-sale for net gains of $943,000 (no losses were incurred). In the first six months of 2013, we sold $220.3 million of investment securities available-for-sale which resulted in net gains of $2.5 million.

As of June 30, 2014, our investment securities portfolio had remaining unamortized premiums of $23.1 million and $220,000 of unaccreted discounts.

The tables below show our investment securities’ gross unrealized losses and fair value by investment category and length of time that individual securities were in a continuous unrealized loss position at June 30, 2014 and December 31, 2013.


	Less than 12 months				12 months or longer				Total
June 30, 2014	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(In Thousands)
Available-for-sale
State and political subdivisions	$	5,727	$	19	$	44,075	$	1,140	$	49,802	$	1,159
GSE		10,951		20		—		—		10,951		20
CMO		16,488		23		73,140		2,162		89,628		2,185
FNMA MBS		27,205		234		195,763		3,137		222,968		3,371
FHLMC MBS		3,798		6		96,077		1,400		99,875		1,406
GNMA MBS		—		—		52,020		525		52,020		525

Total temporarily impaired investments	$	64,169	$	302	$	461,075	$	8,364	$	525,244	$	8,666


	Less than 12 months				12 months or longer				Total
December 31, 2013	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(In Thousands)
Available-for-sale
State and political subdivisions	$	83,036	$	5,426	$	—	$	—	$	83,036	$	5,426
GSE		3,972		13		2,001		4		5,973		17
CMO		73,109		4,173		21,590		1,362		94,699		5,535
FNMA MBS		346,266		14,386		17,800		1,415		364,066		15,801
FHLMC MBS		116,732		4,548		7,307		446		124,039		4,994
GNMA MBS		57,076		1,897		18,829		1,084		75,905		2,981

Total temporarily impaired investments	$	680,191	$	30,443	$	67,527	$	4,311	$	747,718	$	34,754

All securities were AAA-rated at the time of purchase and remained at investment grade at both June 30, 2014 and December 31, 2013. All securities were re-evaluated for OTTI at June 30, 2014. The result of this evaluation showed no OTTI during the first six months of 2014. The weighted average duration of MBS was 5.2 years at June 30, 2014.

At June 30, 2014, we owned investment securities totaling $525.2 million in which the amortized cost basis exceeded fair value. Total unrealized losses on those securities were $8.7 million at June 30, 2014. At December 31, 2013, we owned investment securities totaling $747.7 million in which the amortized cost basis exceeded fair value. Total unrealized loss at December 31, 2013 on those securities was $34.8 million. The temporary impairment is the result of changes in market interest rates subsequent to the purchase of the securities. Our investment portfolio is reviewed each quarter for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in the market. We evaluate our intent and ability to hold securities based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position. In addition, we do not have the intent to sell, nor is it more likely-than-not we will be required to sell these securities before we are able to recover the amortized cost basis.