Securities
 9 Months Ended
Sep. 30, 2016
Investments, Debt and Equity Securities [Abstract]  
Securities
4.  Securities  
                     
 Available-for-Sale Securities
 The following table summarizes available-for-sale securities held by the Company at September 30, 2016:

  

    Available-for-Sale Securities  
September 30, 2016   Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Fair Value  
(in thousands)                          
Obligations of U.S. Government sponsored entities   $ 513,251   $ 13,447   $ 2   $ 526,696  
Obligations of U.S. states and political subdivisions     83,596     1,098     13     84,681  
Mortgage-backed securities – residential, issued by                          
U.S. Government agencies     160,464     1,721     436     161,749  
U.S. Government sponsored entities     591,908     5,202     2,357     594,753  
Non-U.S. Government agencies or sponsored entities     126     0     0     126  
U.S. corporate debt securities     2,500     0     338     2,162  
Total debt securities     1,351,845     21,468     3,146     1,370,167  
Equity securities     1,000     0     56     944  
 Total available-for-sale securities   $ 1,352,845   $ 21,468   $ 3,202   $ 1,371,111  

  

 The following table summarizes available-for-sale securities held by the Company at December 31, 2015:  

  

    Available-for-Sale Securities  
December 31, 2015   Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Fair Value  
(in thousands)                          
Obligations of U.S. Government sponsored entities   $ 551,176   $ 3,512   $ 1,795   $ 552,893  
Obligations of U.S. states and political subdivisions     83,981     898     153     84,726  
Mortgage-backed securities – residential, issued by                          
U.S. Government agencies     94,459     1,535     1,316     94,678  
U.S. Government sponsored entities     656,947     3,599     10,449     650,097  
Non-U.S. Government agencies or sponsored entities     192     2     0     194  
U.S. corporate debt securities     2,500     0     338     2,162  
Total debt securities     1,389,255     9,546     14,051     1,384,750  
Equity securities     1,000     0     66     934  
Total available-for-sale securities   $ 1,390,255   $ 9,546   $ 14,117   $ 1,385,684  

  

Held-to-Maturity Securities

The following table summarizes held-to-maturity securities held by the Company at September 30, 2016:  

 

    Held-to-Maturity Securities  
September 30, 2016   Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Fair Value  
(in thousands)                          
Obligations of U.S. Government sponsored entities   $ 132,195   $ 6,592   $ 0   $ 138,787  
Obligations of U.S. states and political subdivisions     12,455     384     0     12,839  
Total held-to-maturity debt securities   $ 144,650   $ 6,976   $ 0   $ 151,626  

  

The following table summarizes held-to-maturity securities held by the Company at December 31, 2015:  

 

    Held-to-Maturity Securities  
December 31, 2015     Amortized
Cost		       Gross
Unrealized
Gains		       Gross
Unrealized
Losses		        Fair Value  
(in thousands)                                
Obligations of U.S. Government sponsored entities   $ 132,482     $ 649     $ 444     $ 132,687  
Obligations of U.S. states and political subdivisions     13,589       414       4       13,999  
Total held-to-maturity debt securities   $ 146,071     $ 1,063     $ 448     $ 146,686  
                                 

The Company may from time to time sell investment securities from its available-for-sale portfolio. Realized gains on available-for-sale securities were $455,000 and $926,000 for the three and nine months ended September 30, 2016 and $92,000 and $1,107,000 in the same periods during 2015. Realized losses on available-for-sale securities were $0 for the three and nine months ended September 30, 2016 and $0 and $2,000 for the three and nine months ended September 30, 2015. The sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management.

 

The following table summarizes available-for-sale securities that had unrealized losses at September 30, 2016:  

 

    Less than 12 Months   12 Months or Longer   Total  
(in thousands)   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses  
Obligations of U.S. Government sponsored entities   $ 1,347   $ 2   $ 0   $ 0   $ 1,347   $ 2  
Obligations of U.S. states and political subdivisions     8,175     12     754     1     8,929     13  
                                       
Mortgage-backed securities – issued by                                      
U.S. Government agencies     32,598     89     23,615     347     56,213     436  
U.S. Government sponsored entities     92,646     481     131,532     1,876     224,178     2,357  
U.S. corporate debt securities     0     0     2,163     338     2,163     338  
Equity securities     0     0     944     56     944     56  
Total available-for-sale securities   $ 134,766   $ 584   $ 159,008   $ 2,618   $ 293,774   $ 3,202  

    

There were no unrealized losses on held-to-maturity securities for September 30, 2016.

  

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2015:  

 

    Less than 12 Months   12 Months or Longer   Total  
(in thousands)   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses  
Obligations of U.S. Government sponsored entities   $ 183,697   $ 1,618   $ 5,844   $ 177   $ 189,541   $ 1,795  
Obligations of U.S. states and political subdivisions     25,402     141     3,408     12     28,810     153  
                                       
Mortgage-backed securities – residential, issued by                                      
U.S. Government agencies     32,636     350     30,244     966     62,880     1,316  
U.S. Government sponsored entities     364,420     4,102     176,325     6,347     540,745     10,449  
U.S. corporate debt securities     0     0     2,163     338     2,163     338  
Equity securities     0     0     934     66     934     66  
Total available-for-sale securities   $ 606,155   $ 6,211   $ 218,918   $ 7,906   $ 825,073   $ 14,117  

                               

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2015.  

 

    Less than 12 Months   12 Months or Longer   Total  
(in thousands)   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses   Fair Value   Unrealized Losses  
Obligations of U.S. Government sponsored entities   $ 29,671   $ 444   $ 0   $ 0   $ 29,671   $ 444  
                                       
Obligations of U.S. sponsored entities     1,966     4     0     0     1,966     4  
Total held-to-maturity securities   $ 31,637   $ 448   $ 0   $ 0   $ 31,637   $ 448  

   

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and U.S. government agencies such as Government National Mortgage Association. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

 

The Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity. Accordingly, as of September 30, 2016, and December 31, 2015, management has determined that the unrealized losses detailed in the tables above are not other-than-temporary.

 

Ongoing Assessment of Other-Than-Temporary Impairment

 

On a quarterly basis, the Company performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered other-than-temporary impairment (“OTTI”). A debt security is considered impaired if the fair value is less than its amortized cost basis (including any previous OTTI charges) at the reporting date. If impaired, the Company then assesses whether the unrealized loss is other-than-temporary. An unrealized loss on a debt security is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value, discounted at the security’s effective rate, of the expected future cash flows is less than the amortized cost basis of the debt security. As a result, the credit loss component of an other-than-temporary impairment write-down for debt securities is recorded in earnings while the remaining portion of the impairment loss is recognized, net of tax, in other comprehensive income provided that the Company does not intend to sell the underlying debt security and it is more-likely-than not that the Company would not have to sell the debt security prior to recovery of the unrealized loss, which may be to maturity. If the Company intended to sell any securities with an unrealized loss or it is more-likely-than not that the Company would be required to sell the investment securities, before recovery of their amortized cost basis, then the entire unrealized loss would be recorded in earnings.

 

The Company considers the following factors in determining whether a credit loss exists.

 

  - The length of time and the extent to which the fair value has been less than the amortized cost basis;
 
  - The level of credit enhancement provided by the structure which includes, but is not limited to, credit subordination positions, excess spreads, overcollateralization, protective triggers;
 
  - Changes in the near term prospects of the issuer or underlying collateral of a security, such as changes in default rates, loss severities given default and significant changes in prepayment assumptions;
 
  - The level of excess cash flow generated from the underlying collateral supporting the principal and interest payments of the debt securities; and
 
  - Any adverse change to the credit conditions of the issuer or the security such as credit downgrades by the rating agencies.
 

As a result of the other-than-temporarily impairment review process, the Company does not consider any investment security held at September 30, 2016 to be other-than-temporarily impaired.

 

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

 

September 30, 2016              
(in thousands)   Amortized Cost   Fair Value  
Available-for-sale securities:              
Due in one year or less   $ 32,150   $ 32,317  
Due after one year through five years     359,863     367,936  
Due after five years through ten years     196,728     202,923  
Due after ten years     10,606     10,363  
Total     599,347     613,539  
Mortgage-backed securities     752,498     756,628  
Total available-for-sale debt securities   $ 1,351,845   $ 1,370,167  
               
December 31, 2015              
(in thousands)   Amortized Cost   Fair Value  
Available-for-sale securities:              
Due in one year or less   $ 53,936   $ 54,735  
Due after one year through five years     351,462     353,736  
Due after five years through ten years     219,161     218,561  
Due after ten years     13,098     12,749  
Total     637,657     639,781  
Mortgage-backed securities     751,598     744,969  
Total available-for-sale debt securities   $ 1,389,255   $ 1,384,750  

 

September 30, 2016              
(in thousands)   Amortized Cost   Fair Value  
Held-to-maturity securities:              
Due in one year or less   $ 8,798   $ 8,833  
Due after one year through five years     28,281     29,496  
Due after five years through ten years     107,571     113,297  
Total held-to-maturity debt securities   $ 144,650   $ 151,626  
               
December 31, 2015              
(in thousands)   Amortized Cost   Fair Value  
Held-to-maturity securities:              
Due in one year or less   $ 9,249   $ 9,294  
Due after one year through five years     14,069     14,341  
Due after five years through ten years     122,585     122,853  
Due after ten years     168     198  
Total held-to-maturity debt securities   $ 146,071   $ 146,686  

  

The Company also holds non-marketable Federal Home Loan Bank New York (“FHLBNY”) stock, non-marketable Federal Home Loan Bank Pittsburgh (“FHLBPITT”) stock and non-marketable Atlantic Community Bankers Bank stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock, FHLBPITT stock, and ACBB stock totaled $19.8 million, $14.3 million and $95,000 at September 30, 2016, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of September 30, 2016, we have determined that no impairment write-downs are currently required.

 

Trading Securities  

The following summarizes trading securities, at estimated fair value, as of:  

 

(in thousands)   09/30/2016   12/31/2015  
               
Obligations of U.S. Government sponsored entities   $ 0   $ 6,601  
Mortgage-backed securities – residential, issued by U.S. Government sponsored entities     0     767  
Total   $ 0   $ 7,368  

 

In September 2016, the Company sold the remaining $1.5 million of trading securities, after maturities and principal repayments. For the three and nine months ended September 30, 2016, net mark-to-market losses related to the securities trading portfolio were $76,000 and $182,000, respectively, compared to net mark-to-market losses for the three and nine months ended September 30, 2015 of $69,000 and $206,000, respectively.

 

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. Securities carried of $1.3 billion and $1.1 billion at September 30, 2016, and December 31, 2015, respectively, were either pledged or sold under agreements to repurchase.