INVESTMENTS IN DEBT AND EQUITY SECURITIES

Securities Available for Sale. The amortized cost, contractual maturity, gross unrealized gains and losses and fair value of investment securities available for sale at December 31, 2012 and 2011 were as follows:



	Maturity									Total Amortized Cost	Gross Unrealized				Weighted Average Yield
	1 Year or Less			1-5 Years		5-10 Years		After 10 Years		Total Amortized Cost	Gains	Losses		Fair Value	Weighted Average Yield
	(dollars expressed in thousands)
December 31, 2012:
Carrying value:
U.S. Government sponsored agencies	$	10,051		80,328		—		213,892		304,271	6,304	(146	)	310,429	1.42	%
Residential mortgage-backed	364			24,014		219,286		1,251,917		1,495,581	38,983	(497	)	1,534,067	2.32
Commercial mortgage-backed	—			—		806		—		806	109	—		915	4.86
State and political subdivisions	985			3,579		201		—		4,765	164	—		4,929	4.05
Corporate notes	—			137,090		49,704		—		186,794	6,192	(621	)	192,365	3.13
Equity investments	—			—		—		1,000		1,000	22	—		1,022	2.54
Total	$	11,400		245,011		269,997		1,466,809		1,993,217	51,774	(1,264	)	2,043,727	2.26
Fair value:
Debt securities	$	11,476		251,558		275,251		1,504,420
Equity securities	—			—		—		1,022
Total	$	11,476		251,558		275,251		1,505,442

Weighted average yield	2.01		%	2.17	%	2.65	%	2.21	%

December 31, 2011:
Carrying value:
U.S. Government sponsored agencies	$	1,000		231,691		107,019		—		339,710	2,107	—		341,817	1.75	%
Residential mortgage-backed	—			2,726		64,309		1,821,209		1,888,244	36,908	(232	)	1,924,920	2.27
Commercial mortgage-backed	—			—		818		—		818	92	—		910	4.86
State and political subdivisions	310			4,088		786		—		5,184	226	—		5,410	4.00
Corporate Notes	—			122,941		65,088		5,000		193,029	—	(9,216	)	183,813	3.28
Equity investments	—			—		—		1,000		1,000	17	—		1,017	2.83
Total	$	1,310		361,446		238,020		1,827,209		2,427,985	39,350	(9,448	)	2,457,887	2.28
Fair value:
Debt securities	$	1,314		357,194		236,824		1,861,538
Equity securities	—			—		—		1,017
Total	$	1,314		357,194		236,824		1,862,555

Weighted average yield	2.93		%	2.07	%	2.56	%	2.28	%

Securities Held to Maturity. The amortized cost, contractual maturity, gross unrealized gains and losses and fair value of investment securities held to maturity at December 31, 2012 and 2011 were as follows:



	Maturity									Total Amortized Cost	Gross Unrealized				Weighted Average Yield
	1 Year or Less			1-5 Years		5-10 Years		After 10 Years		Total Amortized Cost	Gains	Losses		Fair Value	Weighted Average Yield
	(dollars expressed in thousands)
December 31, 2012:
Carrying value:
U.S. Government sponsored agencies	$	—		—		52,582		—		52,582	269	—		52,851	1.63	%
Residential mortgage-backed	—			—		108,420		466,863		575,283	6,142	(614	)	580,811	1.82
State and political subdivisions	826			1,099		252		1,511		3,688	51	(377	)	3,362	1.89
Total	$	826		1,099		161,254		468,374		631,553	6,462	(991	)	637,024	1.80
Fair value:
Debt securities	$	836		1,129		164,433		470,626
Weighted average yield	2.56		%	3.40	%	1.77	%	1.81	%

December 31, 2011:
Carrying value:
Residential mortgage-backed	$	—		—		728		615		1,343	116	—		1,459	5.06	%
Commercial mortgage-backed	—			6,310		—		—		6,310	447	—		6,757	5.16
State and political subdivisions	1,372			2,004		254		1,534		5,164	44	—		5,208	4.20
Total	$	1,372		8,314		982		2,149		12,817	607	—		13,424	4.76
Fair value:
Debt securities	$	1,387		8,768		1,056		2,213
Weighted average yield	2.55		%	4.67	%	4.60	%	6.61	%

Proceeds from sales of available-for-sale investment securities were $315.2 million, $283.7 million and $249.2 million for the years ended December 31, 2012, 2011 and 2010, respectively. Proceeds from calls of investment securities were $277.2 million, $56.0 million and $2.4 million for the years ended December 31, 2012, 2011 and 2010, respectively. Gross realized gains and gross realized losses on investment securities for the years ended December 31, 2012, 2011 and 2010 were as follows:



	2012			2011		2010
	(dollars expressed in thousands)
Gross realized gains on sales of available-for-sale securities	$	1,675		5,286		8,350
Gross realized losses on sales of available-for-sale securities	(374		)	(1	)	(31	)
Other-than-temporary impairment	(2		)	(3	)	(4	)
Gross realized gains on calls of investment securities	7			53		—
Net realized gain on investment securities	$	1,306		5,335		8,315

Investment securities with a carrying value of approximately $257.6 million and $228.9 million at December 31, 2012 and 2011, respectively, were pledged in connection with deposits of public and trust funds, securities sold under agreements to repurchase and for other purposes as required by law.

On June 30, 2012, the Company reclassified certain of its available-for-sale investment securities to held-to-maturity investment securities at their respective fair values, which totaled $729.1 million, in aggregate. The determination of the reclassification was made by management based on the Company’s current and expected future liquidity levels and the resulting intent to hold such investment securities to maturity. The net gross unrealized gain on these available-for-sale investment securities at the time of transfer of $11.7 million, in aggregate, was recorded as additional premium on the securities and is being amortized over the remaining lives of the respective securities, as further described in Note 13 to the consolidated financial statements.

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2012 and 2011, were as follows:



	Less than 12 months				12 months or more			Total
	Fair Value		Unrealized Losses		Fair Value	Unrealized Losses		Fair Value	Unrealized Losses
	(dollars expressed in thousands)
December 31, 2012:
Available for sale:
U.S. Government sponsored agencies	$	20,018	(146	)	—	—		20,018	(146	)
Residential mortgage-backed	125,449		(441	)	270	(56	)	125,719	(497	)
Corporate notes	—		—		17,675	(621	)	17,675	(621	)
Total	$	145,467	(587	)	17,945	(677	)	163,412	(1,264	)

Held to maturity:
Residential mortgage-backed	$	66,011	(614	)	—	—		66,011	(614	)
State and political subdivisions	1,133		(377	)	—	—		1,133	(377	)
Total	$	67,144	(991	)	—	—		67,144	(991	)

December 31, 2011:
Available for sale:
Residential mortgage-backed	$	67,395	(126	)	22,349	(106	)	89,744	(232	)
Corporate notes	173,813		(9,216	)	—	—		173,813	(9,216	)
Total	$	241,208	(9,342	)	22,349	(106	)	263,557	(9,448	)

The Company does not believe that the investment securities that were in an unrealized loss position at December 31, 2012 and 2011 are other-than-temporarily impaired. The unrealized losses on the investment securities were primarily attributable to fluctuations in interest rates. It is expected that the securities would not be settled at a price less than the amortized cost. Because the decline in fair value is attributable to changes in interest rates and not credit loss, and because the Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these securities before the anticipated recovery of the remaining amortized cost basis or maturity, these investments are not considered other-than-temporarily impaired. The unrealized losses for residential mortgage-backed securities for 12 months or more at December 31, 2012 and 2011 included nine and 11 securities, respectively. The unrealized losses for corporate notes for 12 months or more at December 31, 2012 included six securities.