NOTE 5 – SECURITIES

During the second quarter of 2011, the Company determined that it no longer had the intent to hold until maturity all securities that were previously classified as held-to-maturity. As a result of this determination, all securities were classified as available-for-sale and recorded at fair value as of June 30, 2011. The Company reclassified held-to-maturity securities with amortized cost of $1.6 billion and fair value of $1.7 billion to available-for-sale resulting in an increase in other comprehensive income of $19.7 million during the second quarter of 2011.

The Company did not have any securities classified as held-to-maturity at September 30, 2011. Amortized cost and estimated fair values of held-to-maturity securities as of December 31, 2010 follow:

	December 31, 2010
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
U.S. Government agencies	$	1,246,649	$	27,082	$	4,320	$	1,269,411
Obligations of states and political subdivisions		366,370		4,286		7,376		363,280
Total	$	1,613,019	$	31,368	$	11,696	$	1,632,691

Gross gains of approximately $37,000 and no gross losses were recognized on held-to-maturity securities during 2011 prior to the reclassification of held-to-maturity securities to available-for-sale securities. Gross gains of approximately $52,000 and no gross losses were recognized during the first nine months of 2010. These gains and losses were a result of held-to-maturity securities being called prior to maturity.

A comparison of amortized cost and estimated fair values of available-for-sale securities as of September 30, 2011 and December 31, 2010 follows:

	September 30, 2011
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
U.S. Government agencies	$	1,461,622	$	35,834	$	-	$	1,497,456
Government agency issued residential mortgage-backed securities		412,826		8,100		237		420,689
Government agency issued commercial mortgage-backed securities		31,313		3,243		81		34,475
Obligations of states and political subdivisions		500,280		19,753		602		519,431
Other		8,930		574		-		9,504
Total	$	2,414,971	$	67,504	$	920	$	2,481,555

	December 31, 2010
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
U.S. Government agencies	$	416,005	$	17,153	$	-	$	433,158
Government agency issued residential mortgage-backed securities		498,874		5,954		1,599		503,229
Government agency issued commercial mortgage-backed securities		29,582		676		264		29,994
Obligations of states and political subdivisions		110,946		965		1,746		110,165
Other		18,943		573		-		19,516
Total	$	1,074,350	$	25,321	$	3,609	$	1,096,062

Gross gains of $12.4 million and gross losses of approximately $327,000 were recognized on available-for-sale securities during the first nine months of 2011, while gross gains of $4.5 million and gross losses of $1.5 million were recognized during the first nine months of 2010.

The amortized cost and estimated fair value of available-for-sale securities at September 30, 2011 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Equity securities are considered as maturing after ten years.

	September 30, 2011
			Estimated		Weighted
	Amortized		Fair		Average
	Cost		Value		Yield
	(Dollars in thousands)
Maturing in one year or less	$	300,046	$	305,378		4.42	%
Maturing after one year through five years		1,583,632		1,620,065		2.13
Maturing after five years through ten years		108,732		113,051		4.48
Maturing after ten years		422,561		443,061		5.76
Total	$	2,414,971	$	2,481,555

The following tables summarize information pertaining to temporarily impaired available-for-sale securities with continuous unrealized loss positions at September 30, 2011 and December 31, 2010:

	September 30, 2011
	Continuous Unrealized Loss Position
	Less Than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Available-for-sale securities:
U.S. Government agencies	$	-	$	-		$	-	$	-		$	-	$	-
Government agency issued residential mortgage-backed securities		54,343		(237	)		-		-			54,343		(237	)
Government agency issued commercial mortgage-backed securities		-		-			3,947		(81	)		3,947		(81	)
Obligations of states and political subdivisions		20,750		(453	)		3,563		(149	)		24,313		(602	)
Other		-		-			-		-			-		-
Total	$	75,093	$	(690	)	$	7,510	$	(230	)	$	82,603	$	(920	)

	December 31, 2010
	Continuous Unrealized Loss Position
	Less Than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Held-to-maturity securities:
U.S. Government agencies	$	-	$	-		$	-	$	-		$	-	$	-
Obligations of states and political subdivisions		20,322		(332	)		9,327		(338	)		29,649		(670	)
Total	$	20,322	$	(332	)	$	9,327	$	(338	)	$	29,649	$	(670	)


Available-for-sale securities:
U.S. Government agencies	$	48,881	$	(207	)	$	-	$	-		$	48,881	$	(207	)
Government agency issued residential mortgage-backed securities		6,320		(122	)		-		-			6,320		(122	)
Government agency issued commercial mortgage-backed securities		1,384		(19	)		2,598		(66	)		3,982		(85	)
Obligations of states and political subdivisions		36,704		(297	)		2,459		(205	)		39,163		(502	)
Collateralized debt obligations		-		-			5		(1	)		5		(1	)
Other		-		-			-		-			-		-
Total	$	93,289	$	(645	)	$	5,062	$	(272	)	$	98,351	$	(917	)

Based upon a review of the credit quality of these securities, and considering that the issuers were in compliance with the terms of the securities, management had no intent to sell these securities, and it was more likely than not that the Company would not be required to sell the securities prior to recovery of costs. Therefore, the impairments related to these securities were determined to be temporary. No other-than-temporary impairment has been recorded during 2011.