INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2013

INVESTMENT SECURITIES [Abstract]

INVESTMENT SECURITIES

NOTE D:  INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of March 31, 2013 and December 31, 2012 are as follows:

	March 31, 2013								December 31, 2012
			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	$	549,301	$	55,429	$	0	$	604,730	$	548,634	$	59,081	$	0	$	607,715
Obligations of state and political subdivisions		62,372		4,955		0		67,327		65,742		5,850		0		71,592
Government agency mortgage-backed securities		17,379		920		0		18,299		20,578		1,079		0		21,657
Corporate debt securities		2,919		61		0		2,980		2,924		53		0		2,977
Other securities		13		0		0		13		16		0		0		16
Total held-to-maturity portfolio	$	631,984	$	61,365	$	0	$	693,349	$	637,894	$	66,063	$	0	$	703,957
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	$	737,785	$	32,035	$	74	$	769,746	$	988,217	$	91,040	$	0	$	1,079,257
Obligations of state and political subdivisions		618,853		28,775		935		646,693		629,883		33,070		61		662,892
Government agency mortgage-backed securities		240,909		12,833		397		253,345		253,013		16,989		51		269,951
Pooled trust preferred securities		57,973		0		10,487		47,486		61,979		0		12,379		49,600
Government agency collateralized mortgage obligations		28,861		1,775		0		30,636		32,359		1,579		3		33,935
Corporate debt securities		24,109		1,217		38		25,288		24,136		1,265		44		25,357
Marketable equity securities		351		119		30		440		351		94		43		402
Total available-for-sale portfolio	$	1,708,841	$	76,754	$	11,961	$	1,773,634	$	1,989,938	$	144,037	$	12,581	$	2,121,394
Other Securities:
Federal Home Loan Bank common stock	$	21,612					$	21,612	$	38,111					$	38,111
Federal Reserve Bank common stock		16,050						16,050		16,050						16,050
Other equity securities		4,840						4,840		5,078						5,078
Total other securities	$	42,502					$	42,502	$	59,239					$	59,239

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 March 31, 2013

	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:
U.S. Treasury and agency securities		3	$	79,672	$	74		0	$	0	$	0		3	$	79,672	$	74
Obligations of state and political subdivisions		87		53,061		919		2		929		16		89		53,990		935
Government agency mortgage-backed securities		14		30,772		397		0		0		0		14		30,772		397
Pooled trust preferred securities		0		0		0		3		47,486		10,487		3		47,486		10,487
Corporate debt securities		1		2,896		38		0		0		0		1		2,896		38
Government agency collateralized mortgage       obligations		0		0		0		1		9		0		1		9		0
Marketable equity securities		0		0		0		1		171		30		1		171		30
Total available-for-sale/investment portfolio		105	$	166,401	$	1,428		7	$	48,595	$	10,533		112	$	214,996	$	11,961

As of December 31, 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	$	11,503	$	61		0		0		0		19	$	11,503	$	61
Pooled trust preferred securities		0		0		0		3		49,600		12,379		3		49,600		12,379
Government agency mortgage-backed securities		8		14,354		51		0		0		0		8		14,354		51
Corporate debt securities		1		2,905		44		0		0		0		1		2,905		44
Government agency collateralized mortgage       obligations		4		426		2		2		1,041		1		6		1,467		3
Marketable equity securities		0		0		0		1		158		43		1		158		43
Total available-for-sale/investment portfolio		32	$	29,188	$	158		6	$	50,799	$	12,423		38	$	79,987	$	12,581

Included in the available-for-sale portfolio are pooled trust preferred, class A-1 securities with a current total par value of $59.2 million and unrealized losses of $10.5 million at March 31, 2013.  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 March 31, 2013, an additional 41% - 45% 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 as of March 31, 2013 and management concluded that it does not believe any individual unrealized loss represents an other-than-temporary impairment.  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.  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 March 31, 2013 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 majority of the obligations of state and political subdivisions carry 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 March 31, 2013, 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	$	18,343	$	18,495	$	40,228	$	40,612
Due after one through five years		269,592		296,031		154,607		161,312
Due after five years through ten years		275,681		303,861		787,866		828,678
Due after ten years		50,989		56,663		456,019		458,611
Subtotal		614,605		675,050		1,438,720		1,489,213
Government agency collateralized mortgage obligations		0		0		28,861		30,636
Government agency mortgage-backed securities		17,379		18,299		240,909		253,345
Total	$	631,984	$	693,349	$	1,708,490	$	1,773,194

During the three months ended March 31, 2013 the Company initiated a balance sheet restructuring program through the sale of certain longer duration investment securities and retirement of a portion of the company's existing FHLB borrowings. During the three month period ending March 31, 2013 the Company sold $398.7 million of U.S. Treasury and agency securities, realizing $47.8 million of gains. The proceeds from those sales were utilized to retire $366.6 million of FHLB borrowings with $47.8 million of associated early extinguishments costs.