Investment Securities

The amortized cost, gross unrealized gains and losses, and fair value of the Company’s investment securities as of September 30, 2013 and December 31, 2012 were as follows:



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2013
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	449,001	$	7,011	$	(191	)	$	455,821
Debt Securities Issued by States and Political Subdivisions	589,108		9,469		(11,338		)	587,239
Debt Securities Issued by Corporations	280,305		1,347		(6,396		)	275,256
Mortgage-Backed Securities:
Residential - Government Agencies	702,921		15,571		(1,018		)	717,474
Residential - U.S. Government-Sponsored Enterprises	23,829		1,434		—			25,263
Commercial - Government Agencies	224,711		—		(8,628		)	216,083
Total Mortgage-Backed Securities	951,461		17,005		(9,646		)	958,820
Total	$	2,269,875	$	34,832	$	(27,571	)	$	2,277,136
Held-to-Maturity:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	414,558	$	4,082	$	(1,947	)	$	416,693
Debt Securities Issued by States and Political Subdivisions	253,893		2,556		(22		)	256,427
Debt Securities Issued by Corporations	194,094		177		(3,731		)	190,540
Mortgage-Backed Securities:
Residential - Government Agencies	3,422,851		41,365		(53,289		)	3,410,927
Residential - U.S. Government-Sponsored Enterprises	23,375		1,450		—			24,825
Commercial - Government Agencies	324,628		239		(2,788		)	322,079
Total Mortgage-Backed Securities	3,770,854		43,054		(56,077		)	3,757,831
Total	$	4,633,399	$	49,869	$	(61,777	)	$	4,621,491

December 31, 2012
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	855,070	$	14,936	$	(17	)	$	869,989
Debt Securities Issued by States and Political Subdivisions	753,207		30,159		(955		)	782,411
Debt Securities Issued by Corporations	82,450		1,984		—			84,434
Mortgage-Backed Securities:
Residential - Government Agencies	1,041,669		27,283		(292		)	1,068,660
Residential - U.S. Government-Sponsored Enterprises	35,234		2,064		—			37,298
Commercial - Government Agencies	524,055		1,907		(1,197		)	524,765
Total Mortgage-Backed Securities	1,600,958		31,254		(1,489		)	1,630,723
Total	$	3,291,685	$	78,333	$	(2,461	)	$	3,367,557
Held-to-Maturity:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	190,168	$	5,198	$	—		$	195,366
Debt Securities Issued by Corporations	24,000		4		—			24,004
Mortgage-Backed Securities:
Residential - Government Agencies	3,349,403		86,673		(1,366		)	3,434,710
Residential - U.S. Government-Sponsored Enterprises	31,494		2,102		—			33,596
Total Mortgage-Backed Securities	3,380,897		88,775		(1,366		)	3,468,306
Total	$	3,595,065	$	93,977	$	(1,366	)	$	3,687,676

The table below presents an analysis of the contractual maturities of the Company’s investment securities as of September 30, 2013. Mortgage-backed securities are disclosed separately in the table below as these investment securities may prepay prior to their scheduled contractual maturity dates.



(dollars in thousands)	Amortized Cost		Fair Value
Available-for-Sale:
Due in One Year or Less	$	74,862	$	75,212
Due After One Year Through Five Years	254,924		259,762
Due After Five Years Through Ten Years	644,469		635,390
Due After Ten Years	344,159		347,952
	1,318,414		1,318,316
Mortgage-Backed Securities:
Residential - Government Agencies	702,921		717,474
Residential - U.S. Government-Sponsored Enterprises	23,829		25,263
Commercial - Government Agencies	224,711		216,083
Total Mortgage-Backed Securities	951,461		958,820
Total	$	2,269,875	$	2,277,136

Held-to-Maturity:
Due in One Year or Less	$	80,251	$	80,591
Due After One Year Through Five Years	334,307		336,102
Due After Five Years Through Ten Years	99,806		100,778
Due After Ten Years	348,181		346,189
	862,545		863,660
Mortgage-Backed Securities:
Residential - Government Agencies	3,422,851		3,410,927
Residential - U.S. Government-Sponsored Enterprises	23,375		24,825
Commercial - Government Agencies	324,628		322,079
Total Mortgage-Backed Securities	3,770,854		3,757,831
Total	$	4,633,399	$	4,621,491

Investment securities with carrying values of $2.6 billion and $2.9 billion as of September 30, 2013 and December 31, 2012, respectively, were pledged to secure deposits of governmental entities and securities sold under agreements to repurchase.

There were no sales of investment securities for the three and nine months ended September 30, 2013. Gross realized gains were less than $0.1 million and there were no gross realized losses on the sales of investment securities for the three months ended September 30, 2012. Gross realized gains on the sales of investment securities were $0.3 million and gross realized losses on the sales of investment securities were $0.3 million for the nine months ended September 30, 2012.

The Company’s investment securities in an unrealized loss position, segregated by continuous length of impairment, were as follows:



	Less Than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
September 30, 2013
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	18,693	$	(181	)	$	2,149	$	(10	)	$	20,842	$	(191	)
Debt Securities Issued by States and Political Subdivisions	340,491		(11,337		)	114		(1		)	340,605		(11,338		)
Debt Securities Issued by Corporations	201,817		(6,396		)	—		—			201,817		(6,396		)
Mortgage-Backed Securities:
Residential - Government Agencies	54,834		(382		)	9,417		(636		)	64,251		(1,018		)
Commercial - Government Agencies	216,083		(8,628		)	—		—			216,083		(8,628		)
Total Mortgage-Backed Securities	270,917		(9,010		)	9,417		(636		)	280,334		(9,646		)
Total	$	831,918	$	(26,924	)	$	11,680	$	(647	)	$	843,598	$	(27,571	)
Held-to-Maturity:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	183,850	$	(1,947	)	$	—	$	—		$	183,850	$	(1,947	)
Debt Securities Issued by States and Political Subdivisions	8,105		(22		)	—		—			8,105		(22		)
Debt Securities Issued by Corporations	151,775		(3,731		)	—		—			151,775		(3,731		)
Mortgage-Backed Securities:
Residential - Government Agencies	1,577,637		(53,289		)	—		—			1,577,637		(53,289		)
Commercial - Government Agencies	239,960		(2,498		)	19,891		(290		)	259,851		(2,788		)
Total Mortgage-Backed Securities	1,817,597		(55,787		)	19,891		(290		)	1,837,488		(56,077		)
Total	$	2,161,327	$	(61,487	)	$	19,891	$	(290	)	$	2,181,218	$	(61,777	)

December 31, 2012
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	2,295	$	(14	)	$	564	$	(3	)	$	2,859	$	(17	)
Debt Securities Issued by States and Political Subdivisions	72,400		(955		)	—		—			72,400		(955		)
Mortgage-Backed Securities:
Residential - Government Agencies	7,325		(57		)	22,389		(235		)	29,714		(292		)
Commercial - Government Agencies	261,883		(1,197		)	—		—			261,883		(1,197		)
Total Mortgage-Backed Securities	269,208		(1,254		)	22,389		(235		)	291,597		(1,489		)
Total	$	343,903	$	(2,223	)	$	22,953	$	(238	)	$	366,856	$	(2,461	)
Held-to-Maturity:
Mortgage-Backed Securities:
Residential - Government Agencies	$	351,762	$	(1,366	)	$	—	$	—		$	351,762	$	(1,366	)
Total	$	351,762	$	(1,366	)	$	—	$	—		$	351,762	$	(1,366	)

The Company does not believe that the investment securities that were in an unrealized loss position as of September 30, 2013, which was comprised of 243 securities, represent an other-than-temporary impairment. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. As of September 30, 2013 and December 31, 2012, the gross unrealized losses reported for mortgage-backed securities were related to investment securities issued by the Government National Mortgage Association. The Company does not intend to sell the investment securities that were in an unrealized loss position 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 bases, which may be at maturity.

As of September 30, 2013, included in the Company's investment securities at fair value were securities issued by political subdivisions within the State of Hawaii of $567.5 million, representing 67% of the total fair value of the Company's municipal debt securities. Of the entire Hawaii municipal bond portfolio, 94% were credit-rated Aa2 or better by Moody's while the remaining Hawaii municipal bonds were credit-rated A2 or better by at least one nationally recognized statistical rating organization. Also, approximately 76% of the Company's Hawaii municipal bond holdings were general obligation issuances. As of September 30, 2013, there were no other holdings of municipal debt securities that were issued by a single state or political subdivision which comprised more than 5% of the total fair value of the Company's municipal debt securities.

As of September 30, 2013, the carrying value of the Company’s Federal Home Loan Bank and Federal Reserve Bank stock was as follows:



(dollars in thousands)	September 30, 2013		December 31, 2012
Federal Home Loan Bank Stock	$	58,564	$	60,200
Federal Reserve Bank Stock	19,055		18,952
Total	$	77,619	$	79,152

These securities can only be redeemed or sold at their par value and only to the respective issuing government-supported institution or to another member institution. The Company records these non-marketable equity securities as a component of other assets and periodically evaluates these securities for impairment. Management considers these non-marketable equity securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than by recognizing temporary declines in value.