NOTE C: INVESTMENT SECURITIES

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

	2014								2013
			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
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	$	1,479,134	$	39,509	$	910	$	1,517,733	$	1,252,332	$	1,119	$	41,304	$	1,212,147
Obligations of state and political subdivisions		645,398		26,749		244		671,903		665,441		15,919		12,378		668,982
Government agency mortgage-backed securities		228,971		9,782		1,025		237,728		250,431		8,660		4,113		254,978
Corporate debt securities		26,803		363		75		27,091		26,932		873		218		27,587
Government agency collateralized mortgage obligations		17,330		695		0		18,025		21,779		362		93		22,048
Marketable equity securities		250		195		0		445		250		171		0		421
Total available-for-sale portfolio	$	2,397,886	$	77,293	$	2,254	$	2,472,925	$	2,217,165	$	27,104	$	58,106	$	2,186,163

Other Securities:
Federal Home Loan Bank common stock	$	19,553					$	19,553	$	12,053					$	12,053
Federal Reserve Bank common stock		16,050						16,050		16,050						16,050
Other equity securities		4,446						4,446		4,459						4,459
Total other securities	$	40,049					$	40,049	$	32,562					$	32,562

The Company undertook a balance sheet restructuring program during the first half of 2013 through the sale of certain longer duration investment securities and retirement of the Company’s existing FHLB term borrowings. During the first half of 2013, the Company sold $648.7 million of U.S. Treasury and agency securities classified as available-for-sale, realizing $63.8 million of gains. The proceeds from those sales were utilized to retire FHLB term borrowings.

In December 2013, in response to the issuance of the “Volcker Rule”, the Company sold its entire portfolio of pooled trust preferred securities, realizing a loss of $15.5 million, as well as U.S. Treasury securities with a book value of $417.6 million that were previously classified as held-to-maturity, realizing $32.4 million of gains. The proceeds from these sales were utilized to retire the remaining FHLB term borrowings. As a result of the securities sold from the held-to-maturity classification, the remaining unsold securities within the held-to-maturity classification, with a book value of $198.9 million, were transferred to the available-for-sale classification prior to December 31, 2013. An unrealized loss of $1.8 million was recorded in accumulated other comprehensive income. In addition, as a result of the sale of securities classified as held-to-maturity, the Company did not use the held-to-maturity classification in 2014.

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, 2014

		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 obligations	0	$	0	$	0	4	$	102,363	$	910	4	$	102,363	$	910
Obligations of state and political subdivisions	23		13,413		34	46		26,490		210	69		39,903		244
Government agency mortgage-backed securities	3		5		0	19		34,770		1,025	22		34,775		1,025
Corporate debt securities	1		3,040		1	1		2,755		74	2		5,795		75
Government agency collateralized mortgage obligations	1		0		0	1		5		0	2		5		0
Total available-for-sale/investment portfolio	28	$	16,458	$	35	71	$	166,383	$	2,219	99	$	182,841	$	2,254

As of December 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 obligations	43	$	1,181,214	$	41,304	0	$	0	$	0	43	$	1,181,214	$	41,304
Obligations of state and political subdivisions	302		195,526		11,774	9		4,974		604	311		200,500		12,378
Government agency mortgage-backed securities	43		68,917		3,262	6		8,713		851	49		77,630		4,113
Corporate debt securities	1		3,026		31	1		2,703		187	2		5,729		218
Government agency collateralized mortgage obligations	1		2,601		93	1		7		0	2		2,608		93
Total available-for-sale/investment portfolio	390	$	1,451,284	$	56,464	17	$	16,397	$	1,642	407	$	1,467,681	$	58,106

The unrealized losses reported pertaining to securities issued by the U.S. government and its sponsored entities, include treasuries, agencies, and mortgage-backed 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 majority of the obligations of state and political subdivisions and corporations carry a credit rating of A or better. Additionally, a majority of the obligations of state and political subdivisions carry a secondary level of credit enhancement. 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 unrealized losses in the portfolios are primarily attributable to changes in interest rates. As such, management does not believe any individual unrealized loss as of December 31, 2014 represents OTTI.

The amortized cost and estimated fair value of debt securities at December 31, 2014, 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.

	Available-for-Sale
	Amortized		Fair
(000's omitted)	Cost		Value
Due in one year or less	$	59,386	$	60,045
Due after one through five years		146,559		150,631
Due after five years through ten years		1,698,124		1,746,688
Due after ten years		247,266		259,363
Subtotal		2,151,335		2,216,727
Government agency mortgage-backed securities		228,971		237,728
Government agency collateralized mortgage obligations		17,330		18,025
Total	$	2,397,636	$	2,472,480

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

(000's omitted)	2014		2013		2012
Gross gains on sales of investment securities	$	0	$	96,258	$	350
Gross losses on sales of investment securities		0		15,490		59
Proceeds from the maturities of mortgage-backed securities and CMO's		46,791		83,232		109,843
Purchases of mortgage-backed securities and CMO's		22,234		51,194		26,292

Investment securities with a carrying value of $1.182 billion and $0.978 billion at December 31, 2014 and 2013, respectively, were pledged to collateralize certain deposits and borrowings.