2. SECURITIES

The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio and the corresponding amounts of gross unrealized gains and losses therein:

	December 31,
	2017									2016
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
U.S. GSE securities	$	57,994	$	—	$	(1,180	)	$	56,814	$	64,993	$	—	$	(1,344	)	$	63,649
State and municipal obligations		87,582		259		(819	)		87,022		117,292		212		(1,339	)		116,165
U.S. GSE residential mortgage-backed securities		189,705		29		(2,833	)		186,901		160,446		16		(2,414	)		158,048
U.S. GSE residential collateralized mortgage obligations		314,390		16		(7,016	)		307,390		373,098		149		(5,736	)		367,511
U.S. GSE commercial mortgage-backed securities		6,017		2		(40	)		5,979		6,337		6		(36	)		6,307
U.S. GSE commercial collateralized mortgage obligations		49,965		—		(1,249	)		48,716		56,148		—		(956	)		55,192
Other asset backed securities		24,250		—		(849	)		23,401		24,250		—		(1,697	)		22,553
Corporate bonds		46,000		—		(2,307	)		43,693		32,000		—		(1,703	)		30,297
Total available for sale		775,903		306		(16,293	)		759,916		834,564		383		(15,225	)		819,722

Held to maturity:
State and municipal obligations		60,762		972		(64	)		61,670		66,666		1,085		(130	)		67,621
U.S. GSE residential mortgage-backed securities		11,424		—		(261	)		11,163		13,443		—		(287	)		13,156
U.S. GSE residential collateralized mortgage obligations		54,250		244		(666	)		53,828		61,639		352		(552	)		61,439
U.S. GSE commercial mortgage-backed securities		22,953		77		(438	)		22,592		28,772		136		(509	)		28,399
U.S. GSE commercial collateralized mortgage obligations		31,477		—		(845	)		30,632		41,717		93		(573	)		41,237
Corporate bonds		—		—		—			—		11,000		26		—			11,026
Total held to maturity		180,866		1,293		(2,274	)		179,885		223,237		1,692		(2,051	)		222,878
Total securities	$	956,769	$	1,599	$	(18,567	)	$	939,801	$	1,057,801	$	2,075	$	(17,276	)	$	1,042,600

The following table summarizes securities with gross unrealized losses at December 31, 2017 and 2016, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position:

	December 31,
	2017										2016
	Less than 12 months					Greater than 12 months					Less than 12 months					Greater than 12 months
	Estimated		Gross			Estimated		Gross			Estimated		Gross			Estimated		Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In thousands)	Value		Losses			Value		Losses			Value		Losses			Value		Losses
Available for sale:
U.S. GSE securities	$	—	$	—		$	56,815	$	(1,180	)	$	63,649	$	(1,344	)	$	—	$	—
State and municipal obligations		35,350		(301	)		28,165		(518	)		78,883		(1,338	)		240		(1	)
U.S. GSE residential mortgage-backed securities		107,408		(1,153	)		69,571		(1,680	)		140,514		(2,409	)		241		(5	)
U.S. GSE residential collateralized mortgage obligations		77,705		(759	)		224,932		(6,257	)		319,197		(5,221	)		15,627		(515	)
U.S. GSE commercial mortgage-backed securities		2,345		(40	)		—		—			2,573		(36	)		—		—
U.S. GSE commercial collateralized mortgage obligations		452		(1	)		48,264		(1,248	)		48,901		(886	)		6,292		(70	)
Other asset backed securities		—		—			23,401		(849	)		—		—			22,552		(1,697	)
Corporate bonds		13,588		(412	)		30,105		(1,895	)		17,834		(1,166	)		12,463		(537	)
Total available for sale		236,848		(2,666	)		481,253		(13,627	)		671,551		(12,400	)		57,415		(2,825	)

Held to maturity:
State and municipal obligations		7,709		(57	)		1,009		(7	)		21,867		(130	)		—		—
U.S. GSE residential mortgage-backed securities		1,359		(16	)		9,804		(245	)		13,156		(287	)		—		—
U.S. GSE residential collateralized mortgage obligations		21,329		(94	)		21,112		(572	)		31,297		(455	)		3,873		(97	)
U.S. GSE commercial mortgage-backed securities		8,789		(121	)		8,303		(317	)		12,860		(286	)		5,877		(223	)
U.S. GSE commercial collateralized mortgage obligations		10,341		(116	)		20,290		(729	)		22,666		(372	)		3,790		(201	)
Total held to maturity	$	49,527	$	(404	)	$	60,518	$	(1,870	)	$	101,846	$	(1,530	)	$	13,540	$	(521	)

Other-Than-Temporary Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) quarterly and more frequently when economic or market conditions warrant. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available for sale or held to maturity are generally evaluated for OTTI under FASB ASC 320, “Accounting for Certain Investments in Debt and Equity Securities”. In determining OTTI under the FASB ASC 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet these criteria, the amount of impairment is split into two components: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

At December 31, 2017, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment was directly related to changes in interest rates. The Company generally views changes in fair value caused by changes in interest rates as temporary, which is consistent with its experience. Other asset backed securities are comprised of student loan backed bonds, which are guaranteed by the U.S. Department of Education for 97% to 100% of principal. Additionally, the bonds have credit support of 3% to 5% and have maintained their Aaa Moody’s rating during the time the Bank has owned them. The corporate bonds within the portfolio have all maintained an investment grade rating by either Moody’s or Standard and Poor’s. None of the unrealized losses is related to credit losses. The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2017.

The following table sets forth the estimated fair value, amortized cost and contractual maturities of the securities portfolio at December 31, 2017. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2017
	Within				After One but				After Five but				After
	One Year				Within Five Years				Within Ten Years				Ten Years				Total
	Estimated				Estimated				Estimated				Estimated				Estimated
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
(In thousands)	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
Available for sale:

U.S. GSE securities	$	—	$	—	$	37,271	$	37,994	$	19,543	$	20,000	$	—	$	—	$	56,814	$	57,994
State and municipal obligations		9,588		9,600		45,196		45,683		31,809		31,884		429		415		87,022		87,582
U.S. GSE residential mortgage-backed securities		—		—		—		—		25,203		25,482		161,698		164,223		186,901		189,705
U.S. GSE residential collateralized mortgage obligations		—		—		—		—		5,468		5,543		301,922		308,847		307,390		314,390
U.S. GSE commercial mortgage-backed securities		—		—		5,979		6,017		—		—		—		—		5,979		6,017
U.S. GSE commercial collateralized mortgage obligations		—		—		—		—		—		—		48,716		49,965		48,716		49,965
Other asset backed securities		—		—		—		—		—		—		23,401		24,250		23,401		24,250
Corporate bonds		—		—		—		—		43,693		46,000		—		—		43,693		46,000
Total available for sale		9,588		9,600		88,446		89,694		125,716		128,909		536,166		547,700		759,916		775,903

Held to maturity:

State and municipal obligations		3,766		3,774		17,610		17,430		38,599		37,882		1,695		1,676		61,670		60,762
U.S. GSE residential mortgage-backed securities		—		—		—		—		5,011		5,103		6,152		6,321		11,163		11,424
U.S. GSE residential collateralized mortgage obligations		—		—		—		—		6,769		6,795		47,059		47,455		53,828		54,250
U.S. GSE commercial mortgage-backed securities		—		—		9,373		9,311		4,916		5,022		8,303		8,620		22,592		22,953
U.S. GSE commercial collateralized mortgage obligations		—		—		3,851		4,030		—		—		26,781		27,447		30,632		31,477
Total held to maturity		3,766		3,774		30,834		30,771		55,295		54,802		89,990		91,519		179,885		180,866
Total securities	$	13,354	$	13,374	$	119,280	$	120,465	$	181,011	$	183,711	$	626,156	$	639,219	$	939,801	$	956,769

Sales and Calls of Securities

There were $52.4 million of proceeds on sales of available for sale securities with gross gains of approximately $0.3 million and gross losses of approximately $0.3 million realized in 2017. There were $264.4 million of proceeds on sales of available for sale securities with gross gains of approximately $1.6 million and gross losses of approximately $1.2 million realized in 2016. There were $75.8 million of proceeds on sales of available for sale securities with gross gains of approximately $0.5 million and gross losses of approximately $0.5 million realized in 2015.

Pledged Securities

Securities having a fair value of $513.5 million and $570.1 million at December 31, 2017 and 2016, respectively, were pledged to secure public deposits and FHLB and FRB overnight borrowings.

Trading Securities

The Company did not hold any trading securities during the years ended December 31, 2017 and 2016.

Restricted Securities

The Bank is a member of the FHLB of New York. Members are required to own a particular amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. The Bank is a member of the Atlantic Central Banker’s Bank (“ACBB”) and is required to own ACBB stock. The Bank is also a member of the FRB system and required to own FRB stock. FHLB, ACBB and FRB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank owned $35.3 million and $34.7 million in FHLB, ACBB and FRB stock at December 31, 2017 and 2016, respectively. These amounts were reported as restricted securities in the consolidated balance sheets.

As of December 31, 2017 and 2016, there was no issuer, other than the U.S. Government and its sponsored entities, where the Bank had invested holdings that exceeded 10% of consolidated stockholders’ equity.