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Securities Available-for-Sale

3 Months Ended

Mar. 31, 2013

Securities Available-for-Sale and Investment Securities Held-to-Maturity [Abstract]

Note 4. Securities Available-for-Sale


	March 31, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	( In thousands)
U.S. Treasury	$	2,000	$	1	$	—	$	2,001	$	2,000	$	4	$	—	$	2,004
U.S. Government Sponsored Enterprises		174,986		346		117		175,215		130,048		360		68		130,340
Small Business Administration		7,906		108		—		8,014		8,043		113		—		8,156
U.S. Government Agency and Sponsored Enterprises Mortgage Backed Securities		1,149,692		16,957		1,613		1,165,036		1,212,953		20,816		412		1,233,357
Privately Issued Residential Mortgage Backed Securities		2,805		31		16		2,820		2,938		31		22		2,947
Obligations Issued by States and Political Subdivisions		52,046		30		723		51,353		55,855		41		722		55,174
Other Debt Securities		2,300		—		62		2,238		2,300		—		47		2,253
Equity Securities		458		125		—		583		458		112		—		570

Total	$	1,392,193	$	17,598	$	2,531	$	1,407,260	$	1,414,595	$	21,477	$	1,271	$	1,434,801

Included in U.S. Government Sponsored Enterprise Securities and U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities are securities at fair value pledged to secure public deposits and repurchase agreements amounting to $672,183,000 and $665,028,000 at March 31, 2013 and December 31, 2012, respectively. Also included in securities available-for-sale are securities pledged for borrowing at the Federal Home Loan Bank of Boston amounting to $186,867,000 and $220,313,000 at March 31, 2013 and December 31, 2012, respectively. The Company realized gross gains of $883,000 from the proceeds of $87,570,000 from the sales of available-for-sale securities for the three months ended March 31, 2013. The Company realized gross gains of $148,000 from the proceeds of $72,198,000 from the sales of available-for-sale securities for the three months ended March 31, 2012.

Debt securities of Government Sponsored Enterprises primarily refer to debt securities of Fannie Mae and Freddie Mac.

The following table shows the maturity distribution of the Company’s securities available-for-sale at March 31, 2013.


	Amortized Cost		Fair Value
	( In thousands)
Within one year	$	64,221	$	64,403
After one but within five years		1,021,035		1,035,071
After five but within ten years		293,758		295,090
More than 10 years		11,221		10,675
Non-maturing		1,958		2,021

Total	$	1,392,193	$	1,407,260

The weighted average remaining life of investment securities available-for-sale at March 31, 2013 was 4.3 years. Included in the weighted average remaining life calculation at March 31, 2013 was $154,986,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. These call dates were not utilized in computing the weighted average remaining life. The contractual maturities, which were used in the table above, of mortgage-backed securities will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations.

As of March 31, 2013 and December 31, 2012, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not likely that it will be required to sell these debt securities before the anticipated recovery of its remaining amortized cost. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade. The change in the unrealized losses on the state and municipal securities and the nonagency mortgage-backed securities was primarily caused by changes in credit spreads and liquidity issues in the marketplace.

The unrealized loss on U.S. Government Sponsored Enterprises and U.S. Government Sponsored Enterprises Mortgage Backed Securities related primarily to interest rates and not credit quality and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary. In the case of privately issued mortgage-backed securities, the performance of the underlying loans is analyzed as deemed necessary to determine the estimated future cash flows of the securities. Factors considered include the level of subordination, current and estimated future default rates, current and estimated prepayment rates, estimated loss severity rates, geographic concentrations and origination dates of underlying loans. In the case of marketable equity securities, the severity of the unrealized loss, the length of time the unrealized loss has existed, and the issuer’s financial performance are considered.

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at March 31, 2013. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months and longer. There are 44 and 5 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 425 holdings at March 31, 2013.

March 31, 2013

Less than 12 months

12 months or longer

Total

Temporarily Impaired Investments

Fair Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair Value

Unrealized
Losses

(In thousands)

U.S. Government Sponsored Enterprises

29,883

117

—

29,883

117

U.S. Government Agency and Sponsored Enterprises Mortgage Backed Securities

283,816

1,589

2,834

286,650

1,613

Privately Issued Residential Mortgage Backed Securities

781

1,017

1,798

Obligations Issued by States and Political Subdivisions

—

3,963

723

3,963

723

Other Debt Securities

—

1,439

Total temporarily impaired securities

314,480

1,707

9,253

824

323,733

2,531

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at December 31, 2012. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months and longer. There are 20 and 7 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 458 holdings at December 31, 2012.


	December 31, 2012
	Less than 12 months				12 months or longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. Government Sponsored Enterprises	$	34,967	$	68	$	—	$	—	$	34,967	$	68
U.S. Government Agency and Sponsored Enterprises Mortgage Backed Securities		93,006		383		10,169		29		103,175		412
Privately Issued Residential Mortgage Backed Securities		—		—		1,863		22		1,863		22
Obligations Issued by States and Political Subdivisions		—		—		3,963		722		3,963		722
Other Debt Securities		—		—		1,453		47		1,453		47
Equity Securities		—		—		—		—		—		—

Total temporarily impaired securities	$	127,973	$	451	$	17,448	$	820	$	145,421	$	1,271