Investment Securities

The following table presents investment securities at June 30, 2016 and December 31, 2015, showing that available-for-sale and held-to-maturity securities increased from December 31, 2015 primarily due to redeployment of cash assumed in the branch acquisition into securities (dollars in thousands):



	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
June 30, 2016
Available-for-sale
U.S. Agency mortgage-backed securities (MBS)	$	186,317	$	3,165	$	(149	)	$	189,333
Non-agency MBS	229,512		916		(426		)	230,002
Corporate securities	41,947		197		(1		)	42,143
Mutual fund	531		4		—			535
	$	458,307	$	4,282	$	(576	)	$	462,013
Held-to-maturity
U.S. Agency MBS	$	102,729	$	4,399	$	(3	)	$	107,125
Obligations of state and political subdivisions	39,061		2,020		—			41,081
Tax credit investments	421		—		—			421
	$	142,211	$	6,419	$	(3	)	$	148,627

December 31, 2015
Available-for-sale
U.S. Agency MBS	$	154,691	$	2,698	$	(455	)	$	156,934
Non-agency MBS	118,765		477		(1,016		)	118,226
U.S. Agency asset-backed securities	7,468		800		(23		)	8,245
Corporate securities	26,199		121		—			26,320
Mutual fund	525		12		—			537
	$	307,648	$	4,108	$	(1,494	)	$	310,262
Held-to-maturity
U.S. Agency MBS	$	98,800	$	1,875	$	(5	)	$	100,670
Obligations of state and political subdivisions	421		—		—			421
Tax credit investments	40,203		968		(2		)	41,169
	$	139,424	$	2,843	$	(7	)	$	142,260

The following table presents the contractual maturities of investment securities at June 30, 2016 (dollars in thousands):



	Available-for-sale				Held-to-maturity
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
Due in one year or less	$	9,506	$	9,566	$	—	$	—
Due after one year through five years	45,779		46,016		30,531		31,294
Due after five years through ten years	36,761		37,004		88,812		93,726
Due after ten years	365,730		368,892		22,447		23,186
Mutual fund	531		535		—		—
Tax credit investments	—		—		421		421
	$	458,307	$	462,013	$	142,211	$	148,627

The following table presents the fair value and gross unrealized losses of the Bank’s investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2016 and December 31, 2015 (dollars in thousands):



	Less than 12 months					12 months or more					Total
	Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses
June 30, 2016
Available-for-sale
U.S. Agency MBS	$	50,351	$	(145	)	$	269	$	(4	)	$	50,620	$	(149	)
Non-Agency MBS	74,564		(426		)	—		—			74,564		(426		)
Corporate Securities	1,986		(1		)	—		—			1,986		(1		)
	$	126,901	$	(572	)	$	269	$	(4	)	$	127,170	$	(576	)

Held-to-maturity
U.S. Agency MBS	$	5,070	$	(3	)	$	—	$	—		$	5,070	$	(3	)
	$	5,070	$	(3	)	$	—	$	—		$	5,070	$	(3	)

December 31, 2015
Available-for-sale
U.S. Agency MBS	$	23,630	$	(123	)	$	34,576	$	(332	)	$	58,206	$	(455	)
Non-Agency MBS	66,412		(765		)	12,225		(251		)	78,637		(1,016		)
U.S. Agency asset-backed securities	—		—			1,521		(23		)	1,521		(23		)
	$	90,042	$	(888	)	$	48,322	$	(606	)	$	138,364	$	(1,494	)

Held-to-maturity
U.S. Agency MBS	2,063		(5		)	—		—			$	2,063	$	(5	)
Obligations of state and political subdivisions	725		(2		)	—		—			725		(2		)
	$	2,788	$	(7	)	$	—	$	—		$	2,788	$	(7	)

The unrealized losses on investments in U.S. Agency and non-agency MBS and U.S. Agency asset-backed securities are primarily due to changes in market yield/rate spreads at June 30, 2016 and December 31, 2015 as compared to yield/rate spread relationships prevailing at the time specific investment securities were purchased. Management expects the fair value of these investment securities to recover as securities approach their maturity dates. Management does not believe that the above gross unrealized losses on investment securities are other-than-temporary. Accordingly, no impairment adjustments have been recorded.

Management intends to hold the investment securities classified as held-to-maturity until they mature, at which time the Company will receive full amortized cost value for such investment securities. Furthermore, as of June 30, 2016, management did not have the intent to sell any of the securities classified as held-to-maturity in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.