INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2011

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 3—INVESTMENT SECURITIES

• Securities Available-for-Sale

        The amortized cost, gross unrealized gains and losses and estimated fair values of securities available-for-sale are presented in the tables below as of the dates indicated. The private label collateralized mortgage obligations were acquired in the FDIC-assisted acquisition of Affinity Bank ("Affinity") in August 2009 and are covered by a FDIC loss sharing agreement. Other securities include an investment in overnight money market funds at a financial institution. See Note 9 for information on fair value measurements and methodology.

			June 30, 2011
			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
			(In thousands)
Municipal securities			$	24,119	$	138	$	(198	)	$	24,059
Residental mortgage-backed securities:
	Government and government-sponsored entity pass through securities			936,459		16,655		(4,369	)		948,745
	Government and government-sponsored entity collateralized mortgage obligations			33,760		417		(785	)		33,392
	Covered private label collateralized mortgage obligations			43,362		7,708		(1,569	)		49,501
Other securities				2,295		—		—			2,295
		Total securities available-for-sale	$	1,039,995	$	24,918	$	(6,921	)	$	1,057,992

			December 31, 2010
			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
			(In thousands)
Government-sponsored entity debt securities			$	10,014	$	15	$	—		$	10,029
Municipal securities				7,437		129		—			7,566
Residental mortgage-backed securities:
	Government and government-sponsored entity pass through securities			754,149		9,282		(7,366	)		756,065
	Government and government-sponsored entity collateralized mortgage obligations			47,416		565		(352	)		47,629
	Covered private label collateralized mortgage obligations			45,867		6,653		(2,083	)		50,437
Other securities				2,290		—		—			2,290
		Total securities available-for-sale	$	867,173	$	16,644	$	(9,801	)	$	874,016

        Mortgage-backed securities have contractual terms to maturity and require periodic payments to reduce principal. In addition, expected maturities may differ from contractual maturities because obligors and/or issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

        The following table presents the contractual maturity distribution of our available-for-sale securities portfolio based on amortized cost and fair value as of the date indicated:

		June 30, 2011
		Amortized Cost		Estimated Fair Value
		(In thousands)
Due in one year or less		$	4,345	$	4,345
Due after one year through five years			9,920		10,279
Due after five years through ten years			41,904		43,579
Due after ten years			983,826		999,789
	Total securities available-for-sale	$	1,039,995	$	1,057,992

        At June 30, 2011, the estimated fair value of debt securities and residential mortgage-backed debt securities issued by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") was approximately $900.6 million. We do not own any equity securities issued by Fannie Mae or Freddie Mac.

        As of June 30, 2011, securities available-for-sale with an estimated fair value of $91.9 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

        The following tables present the estimated fair values and the gross unrealized losses on securities by length of time the securities have been in an unrealized loss position as of the dates indicated:

			June 30, 2011
			Less Than 12 Months					12 months or Longer					Total
			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
			(In thousands)
Municipal securities			$	15,141	$	(198	)	$	—	$	—		$	15,141	$	(198	)
Residential mortgage-backed securities:
	Government and government-sponsored entity pass through securities			341,054		(4,368	)		25		(1	)		341,079		(4,369	)
	Government and government-sponsored entity collateralized mortgage obligations			14,366		(696	)		1,530		(89	)		15,896		(785	)
	Covered private label collateralized mortgage obligations			4,238		(259	)		4,566		(1,310	)		8,804		(1,569	)
		Total	$	374,799	$	(5,521	)	$	6,121	$	(1,400	)	$	380,920	$	(6,921	)

			December 31, 2010
			Less Than 12 Months					12 months or Longer					Total
			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
			(In thousands)
Residential mortgage-backed securities:
	Government and government-sponsored entity pass through securities		$	321,537	$	(7,366	)	$	—	$	—		$	321,537	$	(7,366	)
	Government and government-sponsored entity collateralized mortgage obligations			15,690		(327	)		1,553		(25	)		17,243		(352	)
	Covered private label collateralized mortgage obligations			1,579		(472	)		4,980		(1,611	)		6,559		(2,083	)
		Total	$	338,806	$	(8,165	)	$	6,533	$	(1,636	)	$	345,339	$	(9,801	)

        We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at June 30, 2011, and concluded that their losses were a result of the level of market interest rates relative to the types of securities and not a result of the underlying issuers' abilities to repay. Accordingly, we determined that the securities were temporarily impaired. Additionally, we have no plans to sell these securities and believe that it is more likely than not we would not be required to sell these securities before recovery of their amortized cost. Therefore, we did not recognize the temporary impairment in the consolidated statements of earnings (loss).

• FHLB Stock

        At June 30, 2011, the Company had a $50.6 million investment in Federal Home Loan Bank of San Francisco (FHLB) stock carried at cost. In January 2009, the FHLB announced that it suspended excess FHLB stock redemptions and dividend payments. Since this announcement, the FHLB has declared and paid cash dividends in 2010 and 2011, though at rates less than that paid in the past, and repurchased certain amounts of our excess stock. We evaluated the carrying value of our FHLB stock investment at June 30, 2011 and determined that it was not impaired. Our evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, the actions being taken by the FHLB to address its regulatory situation, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.