INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2012

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4—INVESTMENT SECURITIES

• Securities Available-for-Sale

        The following tables present amortized cost, gross unrealized gains and losses and carrying value, which is the estimated fair value, of securities available-for-sale as of the dates indicated. The private label collateralized mortgage obligations were acquired in the FDIC-assisted acquisition of Affinity in August 2009 and are covered by a FDIC loss sharing agreement. Other securities primarily consist of equity securities and an investment in overnight money market funds at a financial institution. See Note 10, Fair Value Measurements, for information on fair value measurements and methodology.

	June 30, 2012
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government and government-sponsored entity pass through securities	$	949,984	$	39,096	$	(90	)	$	988,990
Government and government-sponsored entity collateralized mortgage obligations		93,668		1,977		(40	)		95,605
Covered private label collateralized mortgage obligations		37,944		6,609		(500	)		44,053
Municipal securities		156,527		5,857		(192	)		162,192
Corporate debt securities		51,162		61		(204	)		51,019
Other securities		6,391		3,451		—			9,842
Total securities available-for-sale	$	1,295,676	$	57,051	$	(1,026	)	$	1,351,701

	December 31, 2011
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government and government-sponsored entity pass through securities	$	1,011,222	$	31,350	$	(65	)	$	1,042,507
Government and government-sponsored entity collateralized mortgage obligations		80,353		1,710		(36	)		82,027
Covered private label collateralized mortgage obligations		41,426		5,878		(2,155	)		45,149
Municipal securities		124,079		2,774		(56	)		126,797
Corporate debt securities		25,077		77		(26	)		25,128
Other securities		4,885		—		(135	)		4,750
Total securities available-for-sale	$	1,287,042	$	41,789	$	(2,473	)	$	1,326,358

        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 carrying value as of the date indicated:

	June 30, 2012
Maturity	Amortized Cost		Carrying Value
	(In thousands)
Due in one year or less	$	44,886	$	48,219
Due after one year through five years		4,201		4,340
Due after five years through ten years		32,933		34,744
Due after ten years		1,213,656		1,264,398
Total securities available-for-sale	$	1,295,676	$	1,351,701

        At June 30, 2012, the estimated fair value of debt securities and residential mortgage-backed debt securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation was approximately $1.0 billion.

        As of June 30, 2012, securities available-for-sale with an estimated fair value of $79.8 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

        The following tables present, for those securities that were in a gross unrealized loss position, the carrying values and the gross unrealized losses on securities by length of time the securities were in an unrealized loss position as of the dates indicated:

	June 30, 2012
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government and government- sponsored entity pass through securities	$	29,288	$	(89	)	$	23	$	(1	)	$	29,311	$	(90	)
Government and government- sponsored entity collateralized mortgage obligations		3,883		(40	)		—		—			3,883		(40	)
Covered private label collateralized mortgage obligations		882		(77	)		6,861		(423	)		7,743		(500	)
Municipal securities		17,674		(192	)		—		—			17,674		(192	)
Corporate debt securities		35,936		(204	)		—		—			35,936		(204	)
Total	$	87,663	$	(602	)	$	6,884	$	(424	)	$	94,547	$	(1,026	)

	December 31, 2011
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government and government- sponsored entity pass through securities	$	34,682	$	(64	)	$	22	$	(1	)	$	34,704	$	(65	)
Government and government- sponsored entity collateralized mortgage obligations		10,790		(21	)		1,530		(15	)		12,320		(36	)
Covered private label collateralized mortgage obligations		5,228		(595	)		4,427		(1,560	)		9,655		(2,155	)
Municipal securities		7,755		(56	)		—		—			7,755		(56	)
Corporate debt securities		10,758		(26	)		—		—			10,758		(26	)
Other securities		2,445		(135	)		—		—			2,445		(135	)
Total	$	71,658	$	(897	)	$	5,979	$	(1,576	)	$	77,637	$	(2,473	)

        We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at June 30, 2012, 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 and we did not recognize such impairment in the consolidated statements of earnings. 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.

        During the second quarter, however, we determined that one covered private label collateralized mortgage obligation security was impaired due to deteriorating cash flows and the depletion of the credit support from the subordinated classes of the securitization. We recorded an other-than-temporary impairment loss of $1.1 million, which was entirely credit-related, in the consolidated statement of earnings. This loss was offset by FDIC loss sharing income of $892,000, which represented the FDIC's 80% share of the loss.

• FHLB Stock

        At June 30, 2012, the Company had a $41.7 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, 2011and 2012, though at rates less than those paid in the past, and repurchased certain amounts of our excess stock at carrying value. We evaluated the carrying value of our FHLB stock investment at June 30, 2012, 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, repurchase activity of excess stock by the FHLB at its carrying value, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.