INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2011

INVESTMENT SECURITIES [Abstract]

INVESTMENT SECURITIES

NOTE D:  INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of June 30, 2011 and December 31, 2010 are as follows:

	June 30, 2011				December 31, 2010
		Gross	Gross	Estimated		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair	Amortized	Unrealized	Unrealized	Fair
(000's omitted)	Cost	Gains	Losses	Value	Cost	Gains	Losses	Value
Held-to-Maturity Portfolio:
U.S. Treasury and agency securities	$478,282	$30,307	$0	$508,589	$478,100	$21,571	$29	$499,642
Government agency mortgage-backed securities	43,676	2,147	0	45,823	56,891	2,753	0	59,644
Obligations of state and political subdivisions	70,074	1,898	341	71,631	67,864	277	1,691	66,450
Other securities	42	0	0	42	53	0	0	53
Total held-to-maturity portfolio	$592,074	$34,352	$341	$626,085	$602,908	$24,601	$1,720	$625,789
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	$400,764	$26,721	$713	$426,772	$281,826	$22,231	$0	$304,057
Obligations of state and political subdivisions	517,872	16,198	825	533,245	518,216	10,197	6,195	522,218
Government agency mortgage-backed securities	342,331	14,028	19	356,340	170,673	9,159	116	179,716
Pooled trust preferred securities	68,809	0	19,837	48,972	69,508	0	27,515	41,993
Corporate debt securities	19,007	1,385	0	20,392	25,523	1,634	0	27,157
Government agency collateralized mortgage obligations	52,806	1,352	153	54,005	9,904	491	0	10,395
Marketable equity securities	380	92	0	472	380	54	7	427
Total available-for-sale portfolio	$1,401,969	$59,776	$21,547	$1,440,198	$1,076,030	$43,766	$33,833	$1,085,963

A summary of investment securities that have been in a continuous unrealized loss position for less than, or greater, than twelve months is as follows:

As of June 30, 2011

	Less than 12 Months		12 Months or Longer		Total
		Gross		Gross		Gross
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
(000's omitted)	Value	Losses	Value	Losses	Value	Losses
Held-to-Maturity Portfolio:
Obligations of state and political subdivisions/
Total held-to-maturity portfolio	$9,743	$341	$0	$0	$9,743	$341
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	40,311	713	0	0	40,311	713
Obligations of state and political subdivisions	34,185	385	4,800	440	38,985	825
Government agency mortgage-backed securities	3,920	19	0	0	3,920	19
Pooled trust preferred securities	0	0	48,972	19,837	48,972	19,837
Government agency collateralized mortgage obligations	10,148	153	0	0	10,148	153
Total available-for-sale portfolio	88,564	1,270	53,772	20,277	142,336	21,547
Total investment portfolio	$98,307	$1,611	$53,772	$20,277	$152,079	$21,888

As of December 31, 2010

	Less than 12 Months		12 Months or Longer		Total
		Gross		Gross		Gross
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
(000's omitted)	Value	Losses	Value	Losses	Value	Losses
Held-to-Maturity Portfolio:
U.S. Treasury and agency securities	$14,967	$29	$0	$0	$14,967	$29
Obligations of state and political subdivisions	43,851	1,691	0	0	43,851	1,691
Total held-to-maturity portfolio	58,818	1,720	0	0	58,818	1,720
Available-for-Sale Portfolio:
Obligations of state and political subdivisions	197,066	5,705	4,049	490	201,115	6,195
Pooled trust preferred securities	0	0	41,993	27,515	41,993	27,515
Government agency mortgage-backed securities	14,690	116	0	0	14,690	116
Marketable equity securities	210	2	11	5	221	7
Total available-for-sale portfolio	211,966	5,823	46,053	28,010	258,019	33,833
Total investment portfolio	$270,784	$7,543	$46,053	$28,010	$316,837	$35,553

Included in the available-for-sale portfolio are pooled trust preferred, class A-1 securities with a current total par value of $70.4 million and unrealized losses of $19.8 million at June 30, 2011.  The underlying collateral of these assets is principally trust-preferred securities of smaller regional banks and insurance companies.  The Company's securities are in the super-senior cash flow tranche of the investment pools.  All other tranches in these pools will incur losses before the super senior tranche is impacted.  As of June 30, 2011, an additional 34% - 37% of the underlying collateral in these securities would have to be in deferral or default concurrently to result in an expectation of non-receipt of contractual cash flows.

In determining if unrealized losses are other-than-temporary, management considers the following factors: the length of time and extent that fair value has been less than cost; the financial condition and near term prospects of the issuers; any external credit ratings; the level of excess cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities; and the level of credit enhancement provided by the structure.  A detailed review of the pooled trust preferred securities was completed for the quarter ended June 30, 2011.  This review included an analysis of collateral reports, a cash flow analysis, including varying degrees of projected deferral/default scenarios, and a review of various financial ratios of the underlying banks and insurance companies that make up the collateral pool.  Based on the analysis performed, significant further deferral/defaults and further erosion in other underlying performance conditions would have to exist before the Company would incur a loss.  Therefore, the Company determined an other-than-temporary impairment did not exist at June 30, 2011.  To date, the Company has received all scheduled principal and interest payments and expects to fully collect all future contractual principal and interest payments. The Company does not intend to sell and it is not more likely than not that the Company will be required to sell the underlying securities.   Subsequent changes in market or credit conditions could change those evaluations.

Management does not believe any individual unrealized loss as of June 30, 2011 represents an other-than-temporary impairment.  The unrealized losses reported pertaining to government guaranteed mortgage-backed securities relate primarily to securities issued by GNMA, FNMA and FHLMC, who are currently rated AAA by Moody's Investor Services and Standard & Poor's and are guaranteed by the U.S. government.  The obligations of state and political subdivisions are general purpose debt obligations of various states and political subdivisions.  The unrealized losses in the portfolios are primarily attributable to changes in interest rates.  The Company does not intend to sell these securities, nor is it more likely than not that the Company will be required to sell these securities prior to recovery of the amortized cost.

The amortized cost and estimated fair value of debt securities at June 30, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.  Securities not due at a single maturity date are shown separately.

	Held-to-Maturity		Available-for-Sale
	Amortized	Fair	Amortized	Fair
(000's omitted)	Cost	Value	Cost	Value
Due in one year or less	$10,511	$10,616	$70,767	$72,246
Due after one through five years	64,645	67,931	160,805	168,751
Due after five years through ten years	403,812	430,599	317,349	339,439
Due after ten years	69,430	71,116	457,531	448,945
Subtotal	548,398	580,262	1,006,452	1,029,381
Government agency collateralized mortgage obligations	0	0	52,806	54,005
Government agency mortgage-backed securities	43,676	45,823	342,331	356,340
Total	$592,074	$626,085	$1,401,589	$1,439,726