INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2012

INVESTMENT SECURITIES [Abstract]

INVESTMENT SECURITIES

NOTE D:  INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of September 30, 2012 and December 31, 2011 are as follows:

	September 30, 2012								December 31, 2011
			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	$	547,962	$	63,606	$	0	$	611,568	$	448,260	$	56,800	$	0	$	505,060
Obligations of state and political subdivisions		66,484		6,155		0		72,639		69,623		5,088		0		74,711
Government agency mortgage-backed securities		24,147		1,459		0		25,606		35,576		2,452		0		38,028
Corporate debt securities		2,929		56		0		2,985		0		0		0		0
Other securities		18		0		0		18		36		0		0		36
Total held-to-maturity portfolio	$	641,540	$	71,276		0	$	712,816	$	553,495	$	64,340	$	0	$	617,835
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	$	986,602	$	99,151	$	0	$	1,085,753	$	463,922	$	56,626	$	0	$	520,548
Obligations of state and political subdivisions		672,775		34,587		41		707,321		543,527		29,721		236		573,012
Government agency mortgage-backed securities		267,673		20,622		0		288,295		310,541		20,840		2		331,379
Pooled trust preferred securities		63,970		0		13,133		50,837		68,115		0		24,269		43,846
Government agency collateralized mortgage obligations		35,897		1,116		38		36,975		45,481		1,572		110		46,943
Corporate debt securities		24,163		1,403		17		25,549		21,495		1,360		0		22,855
Marketable equity securities		351		84		61		374		380		92		82		390
Total available-for-sale portfolio	$	2,051,431	$	156,963	$	13,290	$	2,195,104	$	1,453,461	$	110,211	$	24,699	$	1,538,973
Other Securities:
Federal Home Loan Bank common stock	$	38,113					$	38,113	$	38,343					$	38,343
Federal Reserve Bank common stock		15,451						15,451		15,451						15,451
Other equity securities		5,077						5,077		5,108						5,108
Total other securities	$	58,641					$	58,641	$	58,902					$	58,902

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 September 30, 2012

	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		19	$	10,679	$	41		1	$	562	$	0		20	$	11,241	$	41
Pooled trust preferred securities		0		0		0		3		50,837		13,133		3		50,837		13,133
Government agency collateralized mortgage obligations		2		403		3		8		3,866		35		10		4,269		38
Corporate debt securities		1		2,947		17		0		0		0		1		2,947		17
Marketable equity securities		0		0		0		1		140		61		1		140		61
Total available-for-sale/investment portfolio		22	$	14,029	$	61		13	$	55,405	$	13,229		35	$	69,434	$	13,290

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
Government agency mortgage-backed securities		3		2,415		2		0		0		0		3		2,415		2
Pooled trust preferred securities		0		0		0		3		43,846		24,269		3		43,846		24,269
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	$	49,896	$	24,509		35	$	59,293	$	24,699

Included in the available-for-sale portfolio are pooled trust preferred, class A-1 securities with a current total par value of $65.3 million and unrealized losses of $13.1 million at September 30, 2012.  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 September 30, 2012, an additional 38% - 42% 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.

A detailed review of the pooled trust preferred securities was completed for the quarter ended September 30, 2012.  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 OTTI did not exist at September 30, 2012.  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 September 30, 2012 represents OTTI.  The unrealized losses reported pertaining to government guaranteed mortgage-backed securities relate primarily to securities issued by GNMA, FNMA and FHLMC, which 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 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 September 30, 2012, 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	$	19,247	$	19,616	$	40,005	$	40,831
Due after one through five years		269,744		299,886		247,590		268,526
Due after five years through ten years		244,657		273,315		946,581		1,015,277
Due after ten years		83,745		94,393		513,334		544,826
Subtotal		617,393		687,210		1,747,510		1,869,460
Government agency collateralized mortgage obligations		0		0		35,897		36,975
Government agency mortgage-backed securities		24,147		25,606		267,673		288,295
Total	$	641,540	$	712,816	$	2,051,080	$	2,194,730