Investment Securities

9 Months Ended

Sep. 30, 2011

Investment Securities [Abstract]

Investment Securities

6. Investment Securities

The following table reflects the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment securities as of September 30, 2011, and December 31, 2010:

	September 30, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Securities Held-to-Maturity
U.S. government sponsored entities	$	99,955	$	1,818	$	—	$	101,773
State and municipal securities		129,710		3,904		216		133,398
Mortgage-backed securities		996,101		45,221		—		1,041,322
Corporate debt securities		9,970		—		537		9,433
Total securities held-to-maturity	$	1,235,736	$	50,943	$	753	$	1,285,926
Securities Available-for-Sale
U.S. treasury securities	$	—	$	—	$	—	$	—
U.S. government sponsored entities		350,015		1,516		83		351,448
State and municipal securities		1,870		25		8		1,887
Mortgage-backed securities		210,469		11,057		508		221,018
Collateralized mortgage obligations		18,194		611		120		18,685
Asset-backed securities		177		—		6		171
Corporate debt securities		432,582		534		25,687		407,429
Mutual funds		6,000		79		—		6,079
Preferred stock of government sponsored entities		569		1,783		—		2,352
Trust preferred securities		45,501		598		25		46,074
Other equity securities		1,468		760		—		2,228
Total securities available-for-sale	$	1,066,845	$	16,963	$	26,437	$	1,057,371
Total investment securities	$	2,302,581	$	67,906	$	27,190	$	2,343,297

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Securities Held-to-Maturity
U.S. government sponsored entities	$	99,921	$	2,639	$	—	$	102,560
State and municipal securities		130,107		—		8,946		121,161
Mortgage-backed securities		600,107		5,230		1,653		603,684
Corporate debt securities		9,967		—		13		9,954
Total securities held-to-maturity	$	840,102	$	7,869	$	10,612	$	837,359
Securities Available-for-Sale
U.S. treasury securities	$	125,573	$	—	$	6,745	$	118,828
U.S. government sponsored entities		830,269		1,653		6,840		825,082
State and municipal securities		1,875		—		157		1,718
Mortgage-backed securities		627,574		14,854		123		642,305
Collateralized mortgage obligations		24,719		590		115		25,194
Asset-backed securities		245		—		5		240
Corporate debt securities		374,489		1,374		6,438		369,425
Mutual funds		4,000		—		73		3,927
Preferred stock of government sponsored entities		569		150		—		719
Trust preferred securities		14,549		58		170		14,437
Other equity securities		1,468		224		—		1,692
Total securities available-for-sale	$	2,005,330	$	18,903	$	20,666	$	2,003,567
Total investment securities	$	2,845,432	$	26,772	$	31,278	$	2,840,926

The amortized cost and fair value of investment securities at September 30, 2011, by contractual maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or repayment penalties.

	Securities Available-for-Sale				Securities Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	10,081	$	10,104	$	99,955	$	101,773.00
Due after one year through five years		183,381		181,749		—		—
Due after five years through ten years		687,624		671,599		24,827		24,940
Due after ten years (1)		185,759		193,919		1,110,954		1,159,213
Total	$	1,066,845	$	1,057,371	$	1,235,736	$	1,285,926

(1) Equity securities are reported in this category

Proceeds from sales of mortgage-backed securities were $759.7 million and repayments of mortgage-backed securities were $83.6 million during the first nine months of 2011 compared to proceeds from sales of 726.1 million and repayment of $187.1 million during the same period a year ago. Proceeds from sales and repayments of other investment securities were $503.6 million during the first nine months of 2011 compared to $65.1 million during the same period a year ago. Proceeds from maturity and calls of investment securities were $467.7 million during the first nine months of 2011 compared to $2.3 billion during the same period a year ago. Gains of $20.2 million and no losses were realized on sales and calls of investment securities during the first nine months of 2011 compared to gains of $9.7 million and losses of $67,000 realized for the same period a year ago.

At September 30, 2011, all of the Company's mortgage-backed securities were rated as investment grade except for three non-agency issues. Two issues not rated investment grade had a par amount of $433,000 and an unrealized loss of $63,000. The other issue was rated below investment grade by one rating agency and investment grade by another rating agency had a par amount of $7,255,000 and an unrealized loss of $499,000. The unrealized losses resulted from increases in credit spreads subsequent to the date that these securities were purchased. Based on the Company's analysis at September 30, 2011, there was no "other-than-temporary" impairment in these securities due to the low loan to value ratio for the loans underlying these securities and the credit support provided by junior tranches of these securitizations. The Company has the ability and intent to hold the securities for a period of time sufficient for a recovery of cost for those three non-agency mortgage-backed securities issues.

The Company's unrealized loss on investments in corporate bonds relates to a number of investments in bonds of financial institutions, all of which were investment grade at the date of acquisition and as of September 30, 2011, except for one issue, of which the Company owns $5 million of par value, by a regional bank which was downgraded to below investment grade during the fourth quarter of 2010. The unrealized losses were primarily caused by the widening of credit spreads since the dates of acquisition. The contractual terms of those investments do not permit the issuers to settle the security at a price less than the amortized cost of the investment. The Company currently does not believe it is probable that it will be unable to collect all amounts due according to the contractual terms of the investment. Therefore, it is expected that these debentures would not be settled at a price less than the amortized cost of the investment. Because the Company has the ability and intent to hold this investment until a recovery of fair value, which may be maturity, it does not consider its investments in corporate bonds to be other-than-temporarily impaired at September 30, 2011.

The temporarily impaired securities represent 21.2% of the fair value of investment securities as of September 30, 2011. Unrealized losses for securities with unrealized losses for less than twelve months represent 4.0%, and securities with unrealized losses for twelve months or more represent 8.7%, of the historical cost of these securities. Unrealized losses on these securities generally resulted from increases in interest rate spreads subsequent to the date that these securities were purchased. At September 30, 2011, 31 issues of securities had unrealized losses for 12 months or longer and 34 issues of securities had unrealized losses of less than 12 months.

At September 30, 2011, management believed the impairment was temporary and, accordingly, no impairment loss has been recognized in our condensed consolidated statements of operations. The Company expects to recover the amortized cost basis of its debt securities, and has no intent to sell and will not be required to sell available-for-sale debt securities that have declined below their cost before their anticipated recovery.

 The table below shows the fair value, unrealized losses, and number of issuances of the temporarily impaired securities in our investment securities portfolio as of September 30, 2011, and December 31, 2010:

	As of September 30, 2011
	Temporarily Impaired Securities
	Less than 12 months						12 months or longer						Total
	Fair Value		Unrealized Losses		No. of Issuances		Fair Value		Unrealized Losses		No. of Issuances		Fair Value		Unrealized Losses		No. of Issuances
	(Dollars in thousands)
Securities Held-to-Maturity
State and municipal securities	$	8,469	$	19		2	$	8,354	$	197		6	$	16,823	$	216		8
Corporate debt securities		9,433		537		1		—		—		—		9,433		537		1
Total securities held-to-maturity	$	17,902	$	556		3	$	8,354	$	197		6	$	26,256	$	753		9
Securities Available-for-Sale
U.S. government sponsored entities	$	99,932	$	83		1	$	—	$	—		—	$	99,932	$	83		1
State and municipal securities		—		—		—		1,358		8		1		1,358		8		1
Mortgage-backed securities		784		5		7		149		2		3		933		7		10
Mortgage-backed securities-Non-agency		—		—		—		6,856		501		2		6,856		501		3
Collateralized mortgage obligations		—		—		—		712		120		4		712		120		4
Asset-backed securities		—		—		—		171		6		1		171		6		1
Corporate debt securities		204,736		13,191		19		122,902		12,496		14		327,638		25,687		33
Trust preferred securities		8,312		25		4		—		—		—		8,312		25		4
Total securities available-for-sale	$	313,764	$	13,304		31	$	132,148	$	13,133		25	$	445,912	$	26,437		56
Total investment securities	$	331,666	$	13,860		34	$	140,502	$	13,330		31	$	472,168	$	27,190		65
	As of December 31, 2010
	Temporarily Impaired Securities
	Less than 12 months						12 months or longer						Total
	Fair Value		Unrealized Losses		No. of Issuances		Fair Value		Unrealized Losses		No. of Issuances		Fair Value		Unrealized Losses		No. of Issuances
	(Dollars in thousands)
Securities Held-to-Maturity
State and municipal securities	$	121,161	$	8,946		122		—		—		—	$	121,161	$	8,946		122
Mortgage-backed securities		89,439		1,653		2		—		—		—		89,439		1,653		2
Corporate debt securities		9,954		13		1		—		—		—		9,954		13		1
Total securities held-to-maturity	$	220,554	$	10,612		125	$	—	$	—		—	$	220,554	$	10,612		125
Securities Available-for-Sale
U.S. Treasury securities	$	118,828	$	6,745		5	$	—	$	—		—	$	118,828	$	6,745		5
U.S. government sponsored entities		578,118		6,840		12		—		—		—		578,118		6,840		12
State and municipal securities		1,718		157		2		—		—		—		1,718		157		2
Mortgage-backed securities		354		4		7		32		1		1		386		5		8
Mortgage-backed securities-Non-agency		—		—		—		10,127		118		3		10,127		118		3
Collateralized mortgage obligations		—		—		—		887		115		4		887		115		4
Asset-backed securities		—		—		—		240		5		1		240		5		1
Corporate debt securities		310,630		6,438		30		—		—		—		310,630		6,438		30
Mutual funds		3,927		73		1		—		—		—		3,927		73		1
Trust preferred securities		10,384		170		2		—		—		—		10,384		170		2
Total securities available-for-sale	$	1,023,959	$	20,427		59	$	11,286	$	239		9	$	1,035,245	$	20,666		68
Total investment securities	$	1,244,513	$	31,039		184	$	11,286	$	239		9	$	1,255,799	$	31,278		193

Investment securities having a carrying value of $1.60 billion at September 30, 2011, and $1.80 billion at December 31, 2010, were pledged to secure public deposits, other borrowings, treasury tax and loan, Federal Home Loan Bank advances, securities sold under agreements to repurchase, interest rate swaps, and foreign exchange transactions.

At September 30, 2011, securities purchased under agreements to resell were $80.0 million at a rate of 0.07% and matured in October, 2011.