NOTE C: INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of December 31 are as follows:

	2011				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	$448,260	$56,800	$0	$505,060	$478,100	$21,571	$29	$499,642
Obligations of state and political subdivisions	69,623	5,088	0	74,711	67,864	277	1,691	66,450
Government agency mortgage-backed securities	35,576	2,452	0	38,028	56,891	2,753	0	59,644
Other securities	36	0	0	36	53	0	0	53
Total held-to-maturity portfolio	553,495	$64,340	$0	617,835	602,908	$24,601	$1,720	625,789

Available-for-Sale Portfolio:
Obligations of state and political subdivisions	543,527	$29,721	$236	573,012	518,216	$10,197	$6,195	522,218
U.S. Treasury and agency securities	463,922	56,626	0	520,548	281,826	22,231	0	304,057
Government agency mortgage-backed securities	310,541	20,840	2	331,379	170,673	9,159	116	179,716
Pooled trust preferred securities	68,115	0	24,269	43,846	69,508	0	27,515	41,993
Government agency collateralized mortgage obligations	45,481	1,572	110	46,943	9,904	491	0	10,395
Corporate debt securities	21,495	1,360	0	22,855	25,523	1,634	0	27,157
Marketable equity securities	380	92	82	390	380	54	7	427
Subtotal	1,453,461	110,211	24,699	1,538,973	1,076,030	43,766	33,833	1,085,963
Net unrealized gain on available-for-sale portfolio	85,512			–	9,933			–
Total available-for-sale portfolio	1,538,973	$110,211	$24,699	1,538,973	1,085,963	$43,766	$33,833	1,085,963

Other Securities:
Federal Home Loan Bank common stock	38,343			38,343	37,301			37,301
Federal Reserve Bank common stock	15,451			15,451	12,378			12,378
Other equity securities	5,108			5,108	3,774			3,774
Total other securities	58,902			58,902	53,453			53,453

Total	$2,151,370			$2,215,710	$1,742,324			$1,765,205

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 December 31, 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

Available-for-Sale Portfolio:
Obligations of state and political subdivisions	2	$211	$0	6	$6,038	$236	8	$6,249	$236
Pooled trust preferred securities	0	0	0	3	43,019	24,269	3	43,019	24,269
Government agency mortgage-backed securities	3	2,415	2	0	0	0	3	2,415	2
Government agency collateralized mortgage obligations	17	6,648	110	0	0	0	17	6,648	110
Marketable equity securities	1	123	78	3	12	4	4	135	82
Total available-for-sale/investment portfolio	23	$9,397	$190	12	$49,069	$24,509	35	$58,466	$24,699

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	2	$14,967	$29	0	$0	$0	2	$14,967	$29
Obligations of state and political subdivisions	48	43,851	1,691	0	0	0	48	43,851	1,691
Total held-to-maturity portfolio	50	58,818	1,720	0	0	0	50	58,818	1,720

Available-for-Sale Portfolio:
Obligations of state and political subdivisions	174	197,066	5,705	4	4,049	490	178	201,115	6,195
Pooled trust preferred securities	0	0	0	3	41,993	27,515	3	41,993	27,515
Government agency mortgage-backed securities	6	14,690	116	0	0	0	6	14,690	116
Marketable equity securities	2	210	2	3	11	5	5	221	7
Total available-for-sale portfolio	182	211,966	5,823	10	46,053	28,010	192	258,019	33,833

Total investment portfolio	232	$270,784	$7,543	10	$46,053	$28,010	242	$316,837	$35,553

Included in the available-for-sale portfolio are pooled trust preferred, class A-1 securities with a current par value of $69.6 million and unrealized losses of $24.3 million at December 31, 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 this tranche is impacted. An additional 35% - 38% of the underlying collateral would have to be in deferral or default concurrently to result in the 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, the level of credit enhancement provided by the structure, and the Company's ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value. A detailed review of the pooled trust preferred securities was completed as of December 31, 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 issuers. 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 December 31, 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 the securities nor is it more likely than not that the Company will be required to sell the securities. Subsequent changes in market or credit conditions could change those evaluations.

Management does not believe any individual unrealized loss as of December 31, 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, AA+ by Standard & Poor's and are guaranteed by the U.S. government. The obligations of state and political subdivisions are largely general-purpose debt obligations of various states and political subdivisions. The majority of the municipal portfolio carries a credit rating of A or better, as well as, a secondary level of credit enhancement. 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 December 31, 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.

	Held-to-Maturity		Available-for-Sale
	Amortized	Fair	Amortized	Fair
(000's omitted)	Cost	Value	Cost	Value
Due in one year or less	$11,074	$11,183	$30,838	$31,243
Due after one through five years	152,584	169,672	211,594	224,297
Due after five years through ten years	285,481	321,967	413,159	449,799
Due after ten years	68,780	76,985	441,468	454,922
Subtotal	517,919	579,807	1,097,059	1,160,261
Collateralized mortgage obligations	0	0	45,481	46,943
Mortgage-backed securities	35,576	38,028	310,541	331,379
Total	$553,495	$617,835	$1,453,081	$1,538,583

Cash flow information on investment securities for the years ended December 31 is as follows:

(000's omitted)	2011	2010	2009
Gross gains on sales of investment securities	349	0	7
Gross losses on sales of investment securities	319	0	0
Proceeds from the maturities of mortgage-backed securities and CMO's	97,224	93,171	101,176
Purchases of mortgage-backed securities and CMO's	253,378	9,132	214,275

Investment securities with a carrying value of $1.015 billion and $848.6 million at December 31, 2011 and 2010, respectively, were pledged to collateralize certain deposits and borrowings.