NOTE 4—INVESTMENT SECURITIES

Securities Available-for-Sale

The following tables present amortized cost, gross unrealized gains and losses and carrying value (i.e. the estimated fair value), of securities available-for-sale as of the dates indicated. The covered private label collateralized mortgage obligations ("CMO's") were acquired in the FDIC-assisted acquisition of Affinity Bank 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.

	March 31, 2013

Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	751,011	$	30,808	$	(191	)	$	781,628
Government agency and government-sponsored enterprise collateralized mortgage obligations		97,524		1,742		(161	)		99,105
Covered private label collateralized mortgage obligations		34,933		8,974		(122	)		43,785
Municipal securities		362,212		7,926		(4,713	)		365,425
Corporate debt securities		60,807		416		(19	)		61,204
Other securities		6,385		5,245		—			11,630

Total securities available-for-sale	$	1,312,872	$	55,111	$	(5,206	)	$	1,362,777

	December 31, 2012

Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	774,677	$	33,618	$	(453	)	$	807,842
Government agency and government-sponsored enterprise collateralized mortgage obligations		99,956		1,870		(132	)		101,694
Covered private label collateralized mortgage obligations		36,078		8,729		(123	)		44,684
Municipal securities		339,547		10,445		(1,951	)		348,041
Corporate debt securities		42,014		432		(81	)		42,365
Other securities		6,389		4,370		—			10,759

Total securities available-for-sale	$	1,298,661	$	59,464	$	(2,740	)	$	1,355,385

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:

	March 31, 2013

Maturity	Amortized Cost		Carrying Value
	(In thousands)
Due in one year or less	$	7,375	$	12,758
Due after one year through five years		3,940		4,117
Due after five years through ten years		51,365		53,467
Due after ten years		1,250,192		1,292,435

Total securities available-for-sale	$	1,312,872	$	1,362,777

Mortgage-backed securities have contractual terms to maturity, but 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.

At March 31, 2013, the estimated fair value of residential mortgage-backed debt securities issued by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") that were held in our portfolio was approximately $797.3 million. We do not own any equity securities issued by Fannie Mae or Freddie Mac.

As of March 31, 2013, securities available-for-sale with a carrying value of $157.5 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

During the three months ended March 31, 2013, we sold $12.4 million in corporate debt securities for which we realized a $409,000 gross gain. During the three months ended December 31, 2012, we sold $43.9 million in government agency and government-sponsored enterprise pass through securities for which we realized a $1.2 million gross gain. All of the securities were sold as part of our investment portfolio risk management activities to reduce price volatility and duration.

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:

	March 31, 2013

	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 agency and government-sponsored enterprise pass through securities	$	47,483	$	(190	)	$	57	$	(1	)	$	47,540	$	(191	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		16,967		(128	)		1,994		(33	)		18,961		(161	)
Covered private label collateralized mortgage obligations		465		(16	)		1,533		(106	)		1,998		(122	)
Municipal securities		184,175		(4,713	)		—		—			184,175		(4,713	)
Corporate debt securities		5,040		(19	)							5,040		(19	)

Total	$	254,130	$	(5,066	)	$	3,584	$	(140	)	$	257,714	$	(5,206	)

	December 31, 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 agency and government-sponsored enterprise pass through securities	$	67,299	$	(452	)	$	60	$	(1	)	$	67,359	$	(453	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		18,317		(132	)		—		—			18,317		(132	)
Covered private label collateralized mortgage obligations		—		—			1,692		(123	)		1,692		(123	)
Municipal securities		90,303		(1,951	)		—		—			90,303		(1,951	)
Corporate debt securities		16,819		(81	)		—		—			16,819		(81	)

Total	$	192,738	$	(2,616	)	$	1,752	$	(124	)	$	194,490	$	(2,740	)

We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at March 31, 2013, 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' ability to repay. Accordingly, we determined that the securities were temporarily impaired and we did not recognize such impairment in the condensed 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.

The following table presents the composition of our interest income on investment securities:

	Three Months Ended

Securities Interest by Type:	March 31, 2013		December 31, 2012		March 31, 2012
	(In thousands)
Taxable interest	$	5,563	$	5,915	$	8,539
Nontaxable interest		2,425		1,987		980
Dividend income		228		271		61

Total interest income on investment securities	$	8,216	$	8,173	$	9,580

FHLB Stock

At March 31, 2013, the Company had a $33.4 million investment in Federal Home Loan Bank of San Francisco ("FHLB") stock carried at cost. We evaluated the carrying value of our FHLB stock investment at March 31, 2013, 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, the return on the investment, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.